Abstract
One of the key differences between exogenous and endogenous growth models is that a transitory shock to investment share exhibits different long-run effects on per-capita output. Exploring this difference, the present paper evaluates the empirical relevance of the two growth models for the G-7 countries. The underlying shocks are identified by an application of a dynamic factor model. Results show that a transitory shock to investment share permanently increases per-capita output in four countries, offering support to the endogenous growth model. This shock also contributes considerably to accounting for the long-run variability of per-capita output. Overall, the endogenous model is found to be empirically more plausible than previous time series studies suggest.
| Original language | English |
|---|---|
| Pages (from-to) | 262-272 |
| Number of pages | 11 |
| Journal | Economic Modelling |
| Volume | 32 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2013 May 1 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
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An empirical test of exogenous versus endogenous growth models for the G-7 countries. / Huh, Hyeon Seung; Kim, David.
In: Economic Modelling, Vol. 32, No. 1, 01.05.2013, p. 262-272.Research output: Contribution to journal › Article
TY - JOUR
T1 - An empirical test of exogenous versus endogenous growth models for the G-7 countries
AU - Huh, Hyeon Seung
AU - Kim, David
PY - 2013/5/1
Y1 - 2013/5/1
N2 - One of the key differences between exogenous and endogenous growth models is that a transitory shock to investment share exhibits different long-run effects on per-capita output. Exploring this difference, the present paper evaluates the empirical relevance of the two growth models for the G-7 countries. The underlying shocks are identified by an application of a dynamic factor model. Results show that a transitory shock to investment share permanently increases per-capita output in four countries, offering support to the endogenous growth model. This shock also contributes considerably to accounting for the long-run variability of per-capita output. Overall, the endogenous model is found to be empirically more plausible than previous time series studies suggest.
AB - One of the key differences between exogenous and endogenous growth models is that a transitory shock to investment share exhibits different long-run effects on per-capita output. Exploring this difference, the present paper evaluates the empirical relevance of the two growth models for the G-7 countries. The underlying shocks are identified by an application of a dynamic factor model. Results show that a transitory shock to investment share permanently increases per-capita output in four countries, offering support to the endogenous growth model. This shock also contributes considerably to accounting for the long-run variability of per-capita output. Overall, the endogenous model is found to be empirically more plausible than previous time series studies suggest.
UR - http://www.scopus.com/inward/record.url?scp=84875064894&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84875064894&partnerID=8YFLogxK
U2 - 10.1016/j.econmod.2013.02.012
DO - 10.1016/j.econmod.2013.02.012
M3 - Article
AN - SCOPUS:84875064894
VL - 32
SP - 262
EP - 272
JO - Economic Modelling
JF - Economic Modelling
SN - 0264-9993
IS - 1
ER -