The Solow growth model: vector autoregression (VAR) and cross-section time-series analysis

The paper examines whether the Mankiw rt at. results regarding the Solow mo del are specific to the statistical methodology used. Therefore, instead of using cross-section data, annual data were used and the Solow model was in vestigated using a Vector AutoRegression (VAR) analysis for the G7 countrie s, and cross-section time-series data for the G3 countries. Analysis shows that, in both cases, the Mankiw et nl. results generally hold. It also show s that the use of annual data can play an important and complementary role in revealing the differences in the growth process between individual count ries.