In economics, common factors are often assumed to underlie the co-movements of a set of macroeconomic variables. For this reason, many authors have used estimated factors in the construction of prediction models. In this paper, we begin by surveying the extant literature on diffusion indexes. We...

This paper looks at the patterns of causation between income, export, import, and investment growth for 39 developing countries. Our approach differs from previous efforts in a number of ways. First, we examine each country individually in order to allow for complete heterogeneity. Second, we...

This paper looks at the patterns of causation between income, export, import, and investment growth for 39 developing countries. In addition to presenting findings based on panels consisting of all 39 countries, we also examine each country individually in order to allow for richer heterogeneity...