Has the Lucas Paradox been fully explained?

Alfaro, Kalemli-Ozcan, and Volosovych (2008) argue that accounting for differences in institutional quality makes the Lucas Paradox disappear. We show that their key finding is driven by the presence of outliers. Once we control for them, we find that the Lucas Paradox remains.

MoreLess

Year of publication:	2013
Authors:	Azémar, Céline ; Desbordes, Rodolphe
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 121.2013, 2, p. 183-187
Publisher:	Elsevier
Subject:	Capital flows \| Institutional quality \| Lucas Paradox \| Outliers

More details

Type of publication:	Article
Classification:	F21 - International Investment; Long-Term Capital Movements ; O43 - Institutions and Growth
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010709105