Thresholds and Context Dependence in Growth / Atish R. Ghosh, Holger Wolf.

Format:

Book

Author/Creator:

Ghosh, Atish R.

Contributor:

National Bureau of Economic Research.

Wolf, Holger.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6480.

NBER working paper series no. w6480

Language:

English

Subjects (All):

Economic development--Econometric models.

Economic development.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1998.

Cambridge, MA : National Bureau of Economic Research, 1998.

Summary:

Is there a single recipe for fast growth? Much of the recent cross-section empirical growth literature implicitly assumes there is. Yet both development and growth theory as well as casual empiricism suggest pervasive non-linearities in the growth process. Low inflation may grease the wheels of commerce' while high inflation may arrest them, secondary education may be crucial for promoting growth in open economies, but be largely ineffective in war-ravaged countries, etc. Such threshold effects and context dependence are difficult to capture in standard multivariate regressions, but are readily identified by classification tree analysis, undertaken here. Our results suggest that both types of non-linearities are indeed pervasive. The findings go some way towards explaining the limited robustness of cross-country growth regressions, and argue against the existence of a universal growth recipe.

Notes:

Print version record

March 1998.