An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model
Abstract
This paper develops an algorithm for the restricted Generalized Method of Moments (RGMM) to re-evaluate the empirical findings of Mankiw, Romer, and Weil (1992), who emphasized the critical role of human capital accumulation in explaining cross-country income differences. Despite the influence of their results, subsequent literature has raised concerns about potential endogeneity arising from omitted variable bias. To address these concerns, we employ a novel instrumental variable strategy - using the algorithm of the restricted Generalized Method of Moments (RGMM). Using the restricted GMM, we find that the original Mankiw, Romer, and Weil (1992) results are robust for the method of estimation and survive the endogeneity criticisms that are present in the literature.
References
[2] Acemoglu, Daron. (2009). Introduction to Modern Economic Growth. Princeton, NJ: Princeton University Press.
[3] Barro, Robert, and Jong-Wha Lee. (2013). A New Data Set of Educational Attainment in the World, 1950–2010. Journal of Development Economics, 104: 184–98. DOI: 10.1016/j.jdeveco.2012.10.001
[4] Becker, Sascha O., and Ludger Woessmann. (2009). Was Weber Wrong? A Human-Capital Theory of Protestant Economic History. Quarterly Journal of Economics, 124 (2): 531–96. DOI:10.1162/qjec.2009.124.2.531
[5] Benavot, Aaron, and Phyllis Riddle. (1988). The Expansion of Primary Education, 1870–1940: Trends and Issues. Sociology of Education, 61 (3): 191–210. DOI: https://doi.org/10.2307/2112355
[6] Bernanke, Ben S., and Refet S. Gürkaynak. (2001). Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously. NBER Macroeconomics Annual, 16: 11–57. DOI: https://doi.org/10.3386/w8365
[7] Chen, M. Keith. (2013). The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets. American Economic Review, 103 (2). DOI: 10.1257/aer.103.2.690
[8] Dennis, James S., Harlan P. Beach, and Charles H. Fahs. (1911). World Atlas of Christian Missions. New York: Student Volunteer Movement for Foreign Missions.
[9] Mankiw, N. Gregory, David Romer, and David N. Weil. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics. 107 (2): 407–37. DOI: https://doi.org/10.2307/2118477
[10] Nunn, Nathan. (2014). Gender and Missionary Influence in Colonial Africa. In Africa’s Development in Historical Perspective, edited by Emmanuel Akyeampong, Robert H. Bates, Nathan Nunn, and James A. Robinson, 202–240. Cambridge: Cambridge University Press.
[11] Roberts, Seán G., Jamie Winters, and M. Keith Chen. (2015). Future Tense and Economic Decisions: Controlling Cultural Evolution. PLOS ONE, 10 (7). DOI: https://doi.org/10.1371/journal.pone.0132145.
[12] Woodberry, Robert D. (2004). The Shadow of Empire: Christian Missions, Colonial Policy, and Democracy in Post-Colonial Societies. PhD diss., University of North Carolina at Chapel Hill.
[13] Woodberry, Robert D. (2012). The Missionary Roots of Liberal Democracy. American Political Science Review, 106 (2): 244–74. DOI: https://doi.org/10.1017/S0003055412000093
[14] Wooldridge, Jeffrey M. (2010). Econometric Analysis of Cross-Section and Panel Data. 2nd ed. Cambridge, MA: MIT Press.
Non-Exclusive License under Attribution 4.0 International Public License (CC BY 4.0):
This ‘Article’ is distributed under the terms of the license CC-BY 4.0., which lets others distribute, remix, adapt, and build upon this article, even commercially, as long as they credit this article for the original creation. ASERS Publishing will be acknowledged as the first publisher of the Article and a link to the appropriate bibliographic citation (authors, article title, volume issue, page numbers, DOI, and the link to the Published Article on ASERS Publishing’ Platform) must be maintained.