DP6544 Determinants of Economic Growth: Will Data Tell?

Author(s): Antonio Ciccone , Marek Jarocinski

Publication Date: October 2007

Keyword(s): growth regressions , robust growth determinants

JEL(s): E01 , O47

Programme Areas: International Macroeconomics

Link to this Page: www.cepr.org/pubs/dps/DP6544.asp.asp

Many factors inhibiting and facilitating economic growth have been suggested. Will international income data tell which matter when all are treated symmetrically a priori? We find that growth determinants emerging from agnostic Bayesian model averaging and classical model selection procedures are sensitive to income differences across datasets. For example, many of the 1975-1996 growth determinants according to World Bank income data turn out to be irrelevant when using Penn World Table data instead (the WB adjusts for purchasing power using a slightly different methodology). And each revision of the 1960-1996 PWT income data brings substantial changes regarding growth determinants. We show that research based on stronger priors about potential growth determinants is more robust to imperfect international income data.