Growth Empirics Under Model Uncertainty : Is Africa Different?

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Growth Empirics Under Model Uncertainty : Is Africa Different?
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Volume/Issue:
2005/18
Series:
IMF Working Papers
Author(s):
Charalambos Tsangarides
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
January 2005
DOI:
http://dx.doi.org/10.5089/9781451860375.001
ISBN:
9781451860375
ISSN:
1018-5941
Page:
33
This paper attempts to identify robust patterns of cross-country growth behavior in the world as a whole and Africa. It employs a novel methodology that incorporates a dynamic panel estimator, and Bayesian Model Averaging to explicitly account for model uncertainty. The findings indicate that: (i) in addition to initial conditions, various economic factors such as higher investment, lower inflation, lower government consumption, better fiscal stance, improved political environment, exogenous terms-of-trade shocks, and fixed geographical factors are robustly correlated with growth; (ii) what is good for growth around the world is, in principle, also good for growth in Africa; and (iii) political and institutional variables are particularly important in explaining African growth.
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