• DOI:10.1257/0002828042002570
• Corpus ID: 55710066

Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach

@article{Doppelhofer2000DeterminantsOL,
  title={Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach},
  author={Gernot Peter Doppelhofer and Ronald I. Miller and Xavier Sala-i-Martin},
  journal={Macroeconomics eJournal},
  year={2000}
}

• G. Doppelhofer, Ronald I. Miller, X. Sala-i-Martin
• Published 1 June 2000
• Economics
• Macroeconomics eJournal

This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates as a weighted average of OLS estimates for every possible combination of included variables. The weights applied to individual regressions are justified on Bayesian grounds in a way similar to the well-known Schwarz criterion. Of 32 explanatory variables we find 11 to be robustly partially correlated with long-term growth and another five variables to be marginally related. Of all the variables considered, the strongest evidence is for the initial level of real GDP per capita.