Growth regressions have provided important insights into the impact of economic reforms on growth in transition economies.Using principal components to decompose reform variables and construct reform clusters, we address unsettled issues such as the importance of sequencing and reform speed.The...

We present new results for the likelihood-based analysis of the dynamic factor model that possibly includes intercepts and explanatory variables. The latent factors are modelled by stochastic processes. The idiosyncratic disturbances are specified as autoregressive processes with mutually...