Dynamic Panel Methods Research Articles

DIVERSIFICATION OF RISK AND GROWTH

This paper provides evidence that domestic opportunities to share risk have contributed to slower growth. We first provide a simple model economy that demonstrates how a country's ability to diversify risk is linked to its growth rate. In the context of the model economy, we then investigate empirically whether there is any systematic relationship between domestic opportunities to diversify risk and growth. We employ two econometric procedures: (1) traditional instrumental variables estimation and (2) dynamic panel methods. Interpreted in the context of the model economy, the empirical analysis reveals a robust negative relationship between domestic opportunities to diversify risk and both capital stock and output growth.

Volume and Quality of Infrastructure and the Distribution of Income: An Empirical Investigation

We provide evidence on the link between infrastructure development and the distribution of income for the period 1960-1995. To do this, we use several proxies such as roads, railways, telecommunications and energy measures. The approach is comprehensive as cross-country and panel methods are applied. In the latter case, we apply GMM dynamic panel methods in order to minimize for endogeneity problems. Both quantity of infrastructure and quality of infrastructure are negatively linked with income inequality. The quantitative link tends to be stronger in developing countries than the qualitative link. These findings hold when using different econometric methods and most infrastructure measures.

Diversification of risk and saving

This paper provides evidence that domestic opportunities to share risk have contributed to lower rates of private saving. Two econometric procedures are used in the analysis: (1) traditional instrumental variables estimation, and (2) dynamic panel methods. The results reveal a negative relationship between domestic opportunities to diversify risk and aggregate private saving rates in a cross-section of developing and industrial countries.

A Re-Examination of the Purchasing Power Parity Using Non-Stationary Dynamic Panel Methods: A Comparative Approach for Developing and Developed Countries

The aim of this paper is to apply recent advances in the econometrics of non-stationary dynamic panel methods to examine the robustness of the PPP concept for a sample of 73 developed and developing countries. Our investigations indicate that the strong PPP is verified for OECD and MENA countries. However in Africa, Asia, Latin America and the PECO, PPP does not seem relevant to characterize the long-run behavior of the real exchange rate. A widening of our analysis field shows that the nature of the exchange rate regime doesn't condition the validity of the PPP and that the PPP is more easily accepted in countries with high inflation than with low one.