The Determinants of U. S. State Economic Growth: A Less Extreme Bounds Analysis

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This study investigates U.S. state economic growth from 1970-1999. I innovate on previous studies by developing a new approach for addressing "model uncertainty" issues associated with estimating growth equations. My approach borrows from the "extreme bounds analysis" (EBA) approach of Leamer (1985), while also addressing concerns raised by Granger and Uhlig (1990), Salai-Martin (1997) and others that not all specifications are equally likely to be true. I then apply this approach to identify "robust" determinants of state economic growth. My analysis confirms the importance of productivity characteristics of the labor force and industrial composition of a state's economy. I also find that policy variables such as (i) size and structure of government and (ii) taxation are "robust" and economically important determinants of state economic growth.

Keywords: Growth; U. S. State Economic Growth; State Fiscal Policy; Economic Development; Taxes; Model Selection; SIC; AIC; AICc; Extreme Bounds Analysis (search for similar items in EconPapers)
JEL-codes: C51 H10 H20 H30 H70 O40 O51 R11 R58 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2006-02-02
New Economics Papers: this item is included in nep-geo and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: THE DETERMINANTS OF U.S. STATE ECONOMIC GROWTH: A LESS EXTREME BOUNDS ANALYSIS (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:06/05

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