It is common practice to estimate the volatility-growth link by specifying a standard growth equation such that the variance of the error term appears as an explanatory variable in this growth equation. The variance in turn is modelled by a second equation. Hardly any of existing applications of...

We examine how basic research should be financed. While basic research is a public good benefiting innovating entrepreneurs it also affects the entire economy: occupational choices of potential entrepreneurs, wages of workers, dividends to shareholders, and aggregate output. We show that the...

Previous research shows that technical progress at the industry level, measured by sectoral TFP growth, is more localized in continental European countries than in Anglo-Saxon coun-tries. We use EU KLEMS data sets to decompose sectoral TFP for nine European countries by means of a Malmquist...

We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on the likelihood of equilibrium determinacy to be both...

Growth Diagnostics, GD, by Ricardo Hausmann, Dani Rodrik and Andrés Velasco, represents a useful and practical approach in order to identify the most binding constraints to explain low economic growth. According to the authors the full list of specific economic constraints is unknowable...

We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the...

In this paper I consider 28 developed and developing countries, in the period 1980- 1995, and I employ the Within Group and the Generalized Method of Moments estimators to test, respectively, for Total Factor Productivity determinants and labor productivity convergence driving forces...

This paper aims to test the conjecture advanced in a recent work by Bianchi and Menegatti (2007) that usual !convergence panel regressions may produce biased evidence, due to their inability to distinguish between actual catching-up across countries and decreasing growth rates over time within...

Building on a model that integrates reforms into exogenous and endogenous growth models, this paper designs an econometric model of the interplay between economic reform measures, political decisions and economic performance. Several key hypotheses about transition are tested using two-stage...