Abstract
This paper analyses the determinants of economic growth in the post WWII to the pre-crisis period (1953-2007) using the dynamic generalized methods of moments (GMM) panel approach to determine effects of the real and the monetary determinants. Our results obtained from the panel of 61 countries suggest that economic growth varies between periods, as well as with level of economic development. Real determinants of GDP growth (real per capita GDP level, private consumption, investments, government expenditure, exports, and imports) affect the economic growth in all countries, while the monetary determinants (inflation, interest rate, and foreign direct investment) play more important role in the developed countries.
Keywords
Array
Array
References
Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277. doi:10.2307/2297968
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51. doi:10.1016/0304-4076(94)01642-d
Barro, R. (1996). Determinants of Economic Growth: A Cross-Country Empirical Study. Cambridge, MA: National Bureau of Economic Research. doi:10.3386/w5698
Beck, T., Levine, R., & et al., (2000). Finance and the Sources of Growth. Journal of Financial Economics, 58(1-2); 261-300.
Beck, T., & Levine, R. (2004). Stock markets, banks, and growth: Panel evidence. Journal of Banking & Finance, 28(3), 423-442. doi:10.1016/s0378-4266(02)00408-9
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143. doi:10.1016/s0304-4076(98)00009-8
Bond, S.R. (2002). Dynamic panel data models: a guide to micro data methods and practice. Portuguese Economic Journal, 1(2), 141-162. doi:10.1007/s10258-002-0009-9
Calderon, C.A., Chong, A., & Loayza, N.V. (2002). Determinants of Current Account Deficits in Developing Countries. Contributions in Macroeconomics, 2(1), doi:10.2202/1534-6005.1021
deLong B., (1988). Productivity Growth, Convergence, and Welfare: Comment. American Economic Review, Vol. 78, No. 5. pp. 1138-1154.
Grier, K.B., & Tullock, G. (1989). An empirical analysis of cross-national economic growth, 1951–1980. Journal of Monetary Economics, 24(2), 259-276. doi:10.1016/0304-3932(89)90006-8
Kolodko, G.W. (2000). Globalization and Catching-Up: From Recession to Growth in Transition Economies. IMF Working Papers, 00(100), 1. doi:10.5089/9781451852394.001
Krugman, P., & Obstfeld, M. (2003). International Economics: Theory and Policy. Addison Wesley. sixth edition.
Levine, R. (1999). Law, Finance, and Economic Growth. Journal of Financial Intermediation, 8(1-2), 8-35. doi:10.1006/jfin.1998.0255
Levine, R., Loayza, N., & Beck, T. (2000). Financial intermediation and growth: Causality and causes. Journal of Monetary Economics, 46(1), 31-77. doi:10.1016/s0304-3932(00)00017-9
Rajan, R.G., & Zingales, L. (1998). Financial Dependence and Growth. American Economic Review, 88(3); 559-586.
Schumpeter, J.A. (1947). Theoretical Problems of Economic Growth. The Journal of Economic History, 7(S1), 1-9. doi:10.1017/s0022050700065189