MACROECONOMIC PERFORMANCE AND CONVERGENCE IN OECD COUNTRIES

This paper investigates the robustness of the correlation between grow th and a set of variables which comprises accumulation rates in human and physical capital and medium term macroeconomic indicators in OECD countries. We include these variables as additional regressors in the standard growth equation that comes from the human capital-augmented S olow model. Our results show that variables related to medium term mac roeconomic performance affect both growth and convergence. In some per iods these variables even outperform the explanatory power of the conv entional growth variables such as the accumulation rates. Our results also suggest that it is difficult to analyse the contribution to growt h of any particular macroeconomic indicator in an isolated way. Rather , these effects should be studied in a framework that accounts for the macroeconomic performance of a country.