Absolute Convergence, Conditional Convergence, and Growth Regressions скачать в хорошем качестве

Absolute Convergence, Conditional Convergence, and Growth Regressions

I use the Solow model to describe the process of convergence. In doing so, I show that the Solow model predicts "conditional convergence" (that countries sharing the same steady state will converge in terms of their per capita incomes) but not absolute convergence (that all countries irrespective of their steady state will converge). I then move on to explain the main idea behind growth regressions and how they are used to test for convergence. Finally, I dicuss problems in the context of growth regressions such as reverse causality, omitted variables, and p-hacking and highlight some potential solutions.