Abstract
Cross sectional estimation of convergence regressions is known to be hazardous if there is convergence towards heterogeneous steady state values. In this paper, Monte Carlo methods are used to investigate the implications of this parameter heterogeneity problem; The cross sectional and pooled OLS estimators are compared with a panel estimator which is unaffected by heterogeneity. If there is heterogeneity, the latter outperforms both the unconditional and conditional cross sectional and pooled OLS estimators. (C) 2001 Elsevier Science B.V. All rights reserved.
| Original language | English |
|---|---|
| Pages (from-to) | 327-333 |
| Number of pages | 7 |
| Journal | Economics Letters |
| Volume | 70 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Mar 2001 |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 8 Decent Work and Economic Growth
Keywords
- panel data
- unit roots
- convergence
- ECONOMIC-GROWTH
- DYNAMIC-MODELS
- COUNTRIES
- EMPIRICS
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