Solow Growth Model Research Papers (original) (raw)

In this paper we consider di¤erent explanations,for why the coe¢ cient associated with human,capital is often negative,in growth,regressions once country-speci…c e¤ects are controlled for, whereas the coe¢ cient in question is strongly... more

In this paper we consider di¤erent explanations,for why the coe¢ cient associated with human,capital is often negative,in growth,regressions once country-speci…c e¤ects are controlled for, whereas the coe¢ cient in question is strongly positive in cross-sectional or panel results based on the pooling estimator. In turn, we explore: (i) additional sources of unobserved,heterogeneity,stemming,from country- speci…c rates of labor-augmenting technological change, (ii) measurement error in the human capital series being used, and (iii) the lack of variability in the human capital series once the usual covariance transformations,are implemented.,Remaining unobserved,country-speci…c heterogeneity,and measurement,error alone are shown to be inadequate,explanations. The lack of variability in the human,capital series is tackled using a modi…ed,version of the Hausman-Taylor (1981) approach,whose identifying assumptions,are found to be reasonable in the context of the Solow model. JEL: E13, C2...