Empirical Issues and Examples : Growth Theory

This paper deals with the growth literature. In particular, we are fundamentally concerning the recent empirical studies. For this purpose, we mainly base our study on a recent paper called The New Growth Evidence by J. Temple (2000) who gives a very detailed discussion of the empirical issues concerning the growth literature. In this work, we not only give his paper's brief summary but also point out the borders of growth theory with a number of specific examples of empirical studies in growth literature. In this respect, we organize three types of empirical analysis which are achieved by different estimation procedures. In the first example, we deal with cross country evidence in which we aim to point out the growth differences between developed and underdeveloped countries. In order to show these differences we gather data of fifty countries and make cross section analysis in between. We then use Chow methodology to pinpoint the structural break between developed and underdeveloped countries. In the second example, we provide a time series analysis of one country, in which we intend to find out whether a country's productivity level does or does not affect the GNP growth rate. Last and the third example is given from a panel data analysis, in which we take the same sample countries as of the cross section analysis. The rationale is to pool all the countries at first and observe the existence of any regularity, and later to apply panel data analysis to each group of country -namely developed and underdeveloped- by the help of cross section analysis. The purpose of this empirical study is to show robustness of the empirical regularities in the homogeneous type countries. In conclusion, the paper gives brief summaries of theoretical and empirical issues which cover the boundaries of discussions and more importantly all the main types of empirical studies