“Regression to the Mean” is not Reliable——The Persistence of Long-Run Economic Growth Revisited
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| Title | “Regression to the Mean” is not Reliable——The Persistence of Long-Run Economic Growth Revisited
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| Author | Liu Peilin,Jia Shen,Zou Jingxian and Shen Guangjun |
| Organization | Development Research Centre of the State Council;Peking University; Central University of Finance and Economics |
| Email | lpl@drc.gov.cn；js@drc.gov.cn；zoujingxian@gmail.com；hnshgj@126.com |
| Key Words | Economic Growth; Growth Persistence; Advantage of Backwardness; China’s Economy |
| Abstract | In this paper, by using improved statistical methodology and more detailed data, we summarized the cross-country experiences of economic growth and found that the “regression to the mean” framework proposed by Pritchett & Summers (2014) wasn’t robust. The distribution and persistence of growth can vary dramatically among economies at different development stages. Consequently, associated predictions on China and other catching-up economies, by adopting “mean-reversion” framework on global sample, will be seriously biased. Instead, we propose a global growth model incorporating the mechanism of technology-catch up, which performs better at explaining the observed growth patterns for worldwide economies and China after reform and opening period. Lessons from those high-growth economies lead us to believe that China can maintain a medium-to-high growth momentum, as long as it can realize a sustainable TFP growth by promoting the fundamental reforms effectively. |
| Serial Number | WP1172 |
| Time | 2017-03-24 |
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