Reference no: EM131563504

Question: Consider these questions of basic cross country growth regressions. The data is provided.

1. Set up OLS cross-country growth regression and show the result of "absolute convergence" using per capita real GDP growth rate and the log of initial per capita GDP. compare the above results for longer periods such as 1970-1990 and the recent period like 1990-2010. Discuss how and why the results changes.

2. After controlling for common control variables one by one, including initial education (the log of secondary school enrollment ratio), institutional quality measured by GADP, the CPI growth, regional dummies, demonstrate the result of "conditional convergence". Present the result for two different periods.

3. Finally, think of your own variable that might be relevant to economic growth.

a. present the logic how your variable affects economic growth

b. include your variable in the former growth regression model, and present the results. First, use basic control variables of initial GDP and initial education, and then try to include more control variables for robustness check. Discuss the results and limitations of your work.