TY - BOOK ID - 84783038 TI - Institutions and Growth : a GMM/IV Panel VAR Approach PY - 2015 SN - 1513555146 1513544314 1513509632 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Economic development KW - Institutions (Philosophy) KW - Philosophy KW - Econometric models. KW - Econometrics KW - Macroeconomics KW - Institutions and Growth KW - Multiple or Simultaneous Equation Models: Models with Panel Data KW - Semiparametric and Nonparametric Methods KW - Estimation KW - Time-Series Models KW - Dynamic Quantile Regressions KW - Dynamic Treatment Effect Models KW - Diffusion Processes KW - State Space Models KW - Personal Income, Wealth, and Their Distributions KW - Econometrics & economic statistics KW - Estimation techniques KW - Vector autoregression KW - Structural vector autoregression KW - Personal income KW - Econometric analysis KW - National accounts KW - Econometric models KW - Income KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84783038 AB - Both sides of the institutions and growth debate have resorted largely to microeconometric techniques in testing hypotheses. In this paper, I build a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years and find support for the institutions hypothesis. Controlling for individual fixed effects, I find that exogenous shocks to a proxy for institutional quality have a positive and statistically significant effect on GDP per capita. On average, a 1 percent shock in institutional quality leads to a peak 1.7 percent increase in GDP per capita after six years. Results are robust to using a different proxy for institutional quality. There are different dynamics for advanced economies and developing countries. This suggests diminishing returns to institutional quality improvements. ER -