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dc.contributor.authorOwen, P. Dorian
dc.identifier.citationOwen, P. D. (2015). Evaluating ingenious instruments for fundamental determinants of long-run economic growth and development* (Economics Discussion Papers Series No. 1508). University of Otago. Retrieved from
dc.identifier.issn1178-2293 (Online)
dc.description.abstractThe empirical literature on the determinants of cross-country differences in long-run development is characterized by the ingenious nature of many of the instruments used. However, scepticism remains about their ability to provide a valid basis for causal inference. This paper examines the extent to which explicit consideration of the statistical adequacy of the underlying reduced form (RF), which provides an embedding framework for the structural equations, can usefully complement economic theory as a basis for assessing instrument choice in the fundamental determinants literature. Diagnostic testing of RFs in influential studies reveals evidence of model misspecification, with parameter non-constancy and spatial dependence of the residuals almost ubiquitous. This feature, surprisingly not previously identified, potentially undermines inferences about the structural parameters, such as the quantitative and statistical significance of different fundamental determinants.en_NZ
dc.publisherUniversity of Otagoen_NZ
dc.relation.ispartofseriesEconomics Discussion Papers Seriesen_NZ
dc.rightsAttribution-NonCommercial-ShareAlike 4.0 International*
dc.subjectFundamental determinants of economic developmenten_NZ
dc.subjectlong-run economic growthen_NZ
dc.subjectinstrumental variablesen_NZ
dc.subjectreduced formen_NZ
dc.subjectstatistical adequacyen_NZ
dc.titleEvaluating ingenious instruments for fundamental determinants of long-run economic growth and development*en_NZ
dc.typeDiscussion Paperen_NZ
otago.schoolOtago Business School / Department of Economicsen_NZ
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Attribution-NonCommercial-ShareAlike 4.0 International
Except where otherwise noted, this item's licence is described as Attribution-NonCommercial-ShareAlike 4.0 International