GROWTH EMPIRICS - A PANEL-DATA APPROACH - A COMMENT

This paper comments on recent developments in the literature on the ec onometric analysis of international growth and convergence. It notes t hat panel estimates of the neoclassical model, accommodating level eff ects for individual countries through heterogeneous intercepts, deal w ith some of the econometric difficulties arising in some of the earlie r cross-sectional studies. But it notes that, in dynamic panels, heter ogeneity in growth effects and in speeds of convergence renders this e stimator inconsistent also. The pervasiveness of such heterogeneity is demonstrated in three samples of countries, and the effects of (incor rectly) imposing homogeneity on estimated parameters are illustrated a nd discussed.