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There is significant academic evidence that growth in one country tends to have a positive impact on growth in neighboring countries. This paper contributes to this literature by assessing whether growth spillovers tend to vary significantly across world regions and by investigating the contribution of transport and communication infrastructure in promoting neighborhood effects. The study is global, but the main interest is on Sub-Saharan Africa. The authors define neighborhoods both in geographic terms and by membership in the same regional trade association. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in Sub-Saharan Africa. The analysis further finds strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional "success stories" in Sub-Saharan Africa and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread - most importantly infrastructure endowments.

Absolute terms --- Achieving Shared Growth --- Country Strategy & Performance --- Developing countries --- Developing world --- Development report --- Development research --- Development strategy --- Economic development --- Economic Growth --- Economic growth --- Economic Theory & Research --- Economics --- Empirical evidence --- Empirical growth literature --- Empirical literature --- Growth rates --- Growth regressions --- Income levels --- Industrialized countries --- Landlocked countries --- Macroeconomics and Economic Growth --- Policy research --- Poverty Reduction --- Rich countries --- Significant evidence --- Transport --- Transport Economics Policy & Planning

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November 1999 - It is difficult to choose the best model for forecasting real per capita GDP for a particular country or group of countries. This study suggests potential gains from combining time series and growth-regression-based approaches to forecasting. Kraay and Monokroussos consider two alternative methods of forecasting real per capita GDP at various horizons: Univariate time series models estimated country by country; Cross-country growth regressions. They evaluate the out-of-sample forecasting performance of both approaches for a large sample of industrial and developing countries. They find only modest differences between the two approaches. In almost all cases, differences in median (across countries) forecast performance are small relative to the large discrepancies between forecasts and actual outcomes. Interestingly, the performance of both models is similar to that of forecasts generated by the World Bank's Unified Survey. The results do not provide a compelling case for one approach over another, but they do indicate that there are potential gains from combining time series and growth-regression-based forecasting approaches. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to improve the understanding of economic growth. The authors may be contacted at akraay@worldbank.org or gmonokroussos@worldbank.org.

Actual Outcomes --- Country Variation --- Cross-Country Growth Regressions --- Economic Forecasting --- Explanatory Variables --- First-Order --- Forecast --- Forecast Performance --- Forecasting --- Future Growth --- Growth Forecasts --- Growth Models --- Growth Projections --- Growth Regression --- Macroeconomics and Economic Growth --- Popular Empirical Framework --- Relative Forecast Performance --- Sample Forecasting --- Time Series --- Time Series Model --- Time Series Models --- Time Series Variation

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Existing empirical studies on the relation between inequality and growth have been criticized for their focus on income inequality and their use of cross-country data sets. Schipper and Hoogeveen use two sets of small area welfare estimates-often referred to as poverty maps-to estimate a model of rural per capita expenditure growth for Uganda between 1992 and 1999. They estimate the growth effects of expenditure and education inequality while controlling for other factors, such as initial levels of expenditure and human capital, family characteristics, and unobserved spatial heterogeneity. The authors correct standard errors to reflect the uncertainty due to the fact that they use estimates rather than observations. They find that per capita expenditure growth in rural Uganda is affected positively by the level of education as well as by the degree of education inequality. Expenditure inequality does not have a significant impact on growth.

Cross-Country Data --- Data Sets --- Developing Countries --- Economic Growth --- Empirical Evidence --- Empirical Research --- Empirical Studies --- Equity and Development --- Growth Regression --- Growth Regressions --- Health, Nutrition and Population --- Human Capital --- Income --- Income Inequality --- Inequality --- Inequality Measure --- Macroeconomics and Economic Growth --- Policy Research --- Population Policies --- Poverty Impact Evaluation --- Poverty Incidence --- Poverty Reduction --- Poverty Reduction Strategies --- Pro-Poor Growth --- Regional Dummies --- Rural Development --- Rural Poverty Reduction --- Services and Transfers to Poor --- Significant Effect --- Significant Impact