Standard macroeconomic models suggest that the ‘great ratios’ of consumptionto output and investment to output should be stable functions of structural parameters. We examine whether the ratios are stationary for the US and UK, allowing for structural breaks that could reflect timevarying...

We introduce a new ‘supply-push’ instrument for foreign aid, to be used together with an instrumental variable estimator that filters out interactive fixed effects. We use this instrument to study the effects of aid on macroeconomic ratios, and especially the ratios of consumption,...

Since the early 1990s, there has been a renaissance in the study of regional growth, spurred by new models, methods and data. We survey a range of modelling traditions, and some formal approaches to the ’hard problem’ of regional economics, namely the joint consideration of agglomeration and...

Who benefits from economic growth? This paper analyses the distributional impact of different types of growth within a two-sector model. The paper first presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire...

This paper demonstrates some techniques for testing the robustness of cross-section and panel data regressions, and applies them to the influential augmented Solow growth model. The paper focuses on robust estimation and analysis of sensitivity to measurement error. In particular, it is shown...

Since the early 1990s, there has been a renaissance in the study of regional growth, spurred by new models, methods and data. We survey a range of modelling traditions, and some formal approaches to the 'hard problem' of regional economics, namely the joint consideration of agglomeration and...

This Paper highlights a problem in using the first-differenced GMM panel data estimator to estimate cross-country growth regressions. When the time series are persistent, the first-differenced GMM estimator can be poorly behaved, since lagged levels of the series provide only weak instruments...

The idea that income differences between rich and poor nations arise through multiple equilibria or ‘poverty traps’ is as intuitive as it is difficult to verify. In this Paper, we explore the empirical relevance of such models. We calibrate a simple two-sector model for 127 countries, and...