USING PANEL-DATA TO EVALUATE GROWTH THEORIES

The paper formulates a method for using panel data to compare endogeno us growth theories that predict cross-country differences in trend gro wth rates with exogenous growth models that predict parallel balanced growth paths. Using this method, the paper rejects theories that predi ct even small differences in trend growth rates for a sample of rich c ountries and a sample of countries with well-educated populations. Exo genous growth theories may thus characterize the growth experiences of these countries. By con;rast: the paper cannot reject theories that p redict widely different trend growth rates for a sample of countries w ith poorly educated populations.