Nonlinearities in Cross-Country Growth Regressions: A Bayesian Averaging of Thresholds BAT ApproachReport as inadecuate


Nonlinearities in Cross-Country Growth Regressions: A Bayesian Averaging of Thresholds BAT Approach


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Publication Date: 2007-02

Series: CWPE

0706

Publisher: Faculty of Economics

Language: English

Type: Working Paper

Metadata: Show full item record

Citation: Cuaresma, J. C., & Doppelhofer, G. (2007). Nonlinearities in Cross-Country Growth Regressions: A Bayesian Averaging of Thresholds (BAT) Approach. https://doi.org/10.17863/CAM.5486

Abstract: We propose a Bayesian Averaging of Thresholds (BAT) approach for assessing the existence and quantifying the effect of threshold effects in cross-country growth regressions in the presence of model uncertainty. The BAT method extends the Bayesian Averaging of Classical Estimates (BACE) approach proposed by Sala-i-Martin, Doppelhofer, and Miller (2004) by allowing for uncertainty over nonlinear threshold effects. We apply our method to a set of determinants of long-term economic growth in the cross section of 88 countries. Our results suggest that when model uncertainty is taken into account there is no evidence for robust threshold effects caused by the Initial Income, measured by GDP capita in 1960, but that the Number of Years an Economy has Been Open is an important source of nonlinear effects on growth.

Keywords: Model Uncertainty, Model Averaging, Threshold Estimation, Non-Linearities, Determinants of Economic Growth

Identifiers:

This record's DOI: https://doi.org/10.17863/CAM.5486

This record's URL: http://www.dspace.cam.ac.uk/handle/1810/194686https://www.repository.cam.ac.uk/handle/1810/194686







Author: Cuaresma, Jesus CrespoDoppelhofer, Gernot

Source: https://www.repository.cam.ac.uk/handle/1810/194686



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