Empirical Applications of Neoclassical Growth Models the Fit of the Solow Augmented Growth Model

The theories of country growth models are supported by the high scale variation observed in these countries' growth rates. This is the reason behind those typical questions, like "Why did some East Asian countries grow so much?", amongst others. Therefore, a lot of recent research has been focused in trying to explain why some countries are richer than others, using, for example, the human capital-augmented Solow Swan model of dispersion in income levels. The article by Mankiw, Romer and Weil [1992] contains a thorough empirical analysis of this type of Solow model augmented with human capital, based on version Penn World Table (ab hinc PWT) 4.0 of the famous Summers and Heston dataset. In this paper I apply a similar analysis to the augmented Solow model as presented in Jones [2002], Chapter 3. Like the augmented Solow model of Mankiw, Jones' model has the basic Solow model as a special case. Using a more recent version PWT 5.6 of the Summers and Heston dataset, updated until 1997 and with the variable referring to the fraction of time individuals spend on learning new skills added, this paper aims to perform a new and revisited level and convergence analysis of both the (un)restricted basic and augmented Solow-Swan Model