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Truth and robustness in cross-country growth regressions

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Date
2004-12-01
Authors
Hoover, KD
Perez, SJ
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Abstract
We re-examine studies of cross-country growth regressions by Levine and Renelt (American Economic Review, Vol. 82, 1992, pp. 942-963) and Sala-i-Martin (American Economic Review, Vol. 87, 1997a, pp. 178-183; Economics Department, Columbia, University, 1997b). In a realistic Monte Carlo experiment, their variants of Edward Leamer's extreme-bounds analysis are compared with a cross-sectional version of the general-to-specific search methodology associated with the LSE approach to econometrics. Levine and Renelt's method has low size and low power, while Sala-i-Martin's method has high size and high power. The general-to-specific methodology is shown to have a near nominal size and high power. Sala-i-Martin's method and the general-to-specific method are then applied to the actual data from Sala-i-Martin's original study.
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Journal article
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https://hdl.handle.net/10161/2079
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Scholars@Duke

Hoover

Kevin Douglas Hoover

Professor of Economics
Professor Hoover's research interests include macroeconomics, monetary economics, the history of economics, and the philosophy and methodology of empirical economics. His recent work in economics has focused on the application of causal search methodologies for structural vector autoregression, the history of microfoundational programs in macroeconomics, and Roy Harrod's early work on dynamic macroeconomics. In philosophy, he has concentrated on issues related to causality, especially in economi
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