Saturday, March 30, 2019

Which variables are correlated in what ways with economic development?

From Handbook of Economic Growth Volume 1A Edited by Aghion and Durlauf

There is a table of 145 variables which developmental economists have sought to correlate with economic development. The variable with a + indicates that it is positively correlated with economic development. If it is a negative, then is negatively correlated. If there is no clear correlation it is NA and if different studies show different results then it is MIXED.

Appendix B: Variables in cross-country growth regressions Page 652
Capitalism +
Capital account liberalization +
Corruption -

Democracy
Minimum levels +
. . . Higher levels -

Demographic characteristics
Share of population 15 or below -
Share of population 65 or over NA
Growth of 15–65 population share +

Education
College level -
Female (level) -
Female (growth) -
Male (level) +
Male (growth) +
Overall (level) +

Primary level +
Secondary level +
Initial income ∗ male schooling -
Proportion of engineering students +
Proportion of law students -

Ethnicity and language
Ethno-linguistic fractionalization -
Language diversity -

Fertility -

Finance
Stock markets +
Banks +
Dollarization +
Depth +
Competition ∗ development +
Repression -
Sophistication +
Credit +
Volatility +
Foreign direct investment +
Fraction of mining in GDP +

Geography
Absolute latitude +
Disease ecology +
Land locked -
Coastline (length) +
Arable land +
Rainfall +
Variance of rainfall -
Maximum temperature -

Government
Consumption (growth) +
Consumption (level) -
Deficits -
Investment +
Various expenditures -
Military expenditures -
Military expenditures under threat +
Various taxes NA

Growth rate
of the G-7 countries +
in the previous period +

Health
Life expectancy +
Change in malaria infection rate
Adult survival rate

Industrial structure
% Small and medium enterprises +
Ease of entry and exit +

Inequality
Democratic countries -
Non-democratic countries +
Overall -

Inflation
Growth -
Level -
Variability -

Infrastructure proxies +

Initial income -

Investment ratio +

Investment type
Equipment or fixed capital +
Non-equipment +

Labor
Productivity growth +
Productivity quality +
Labor force part. rate +

Luck
External debt dummy -
External transfers NA
Improvement in terms of trade +

Money growth +

Neighboring countries’ education proxies, initial
incomes, investment ratios and population growth
rates +

Political instability proxies -

Political rights and civil liberties indices
Civil liberties Mixed
Overall +
Political rights +

Political institutions
Constraints on executive +
Judicial independence +

Property rights
ICRG index Knack (+
Expropriation risk +

Population
Density +
Growth -

Price distortions
Consumption price Mixed
Investment price -

Price levels
Consumption price +
Investment price -

Real exchange rate
Black market premium -
Distortions Dollar -
Variability Dollar -

Regional effects
Absolute latitude +
East Asia +
Former Spanish colonies -
Latin America -
Sub-Saharan Africa -

Religion
Buddhist +
Catholic Mixed
Confucian Barro +
Muslim +
Protestant +
Religious belief +
Attendance -

Rule of law indices +

Scale effects
Total area NA
Total labor force NA

Social capital and related
Social “infrastructure” +
Citizen satisfaction with government + (Italy)
Civic participation Mixed (Asia)
Groups – as defined by Keefer and Knack Mixed

Institutional performance +

Civic community (index of
participation, newspaper readership,
political behavior) +

Social development index NA
Extent of mass communication NA
Kinship NA
Mobility NA
Middle class NA
Outlook NA
Social capital (WVS) +
Social achievement norm +
Capability +

Trade policy indices
Import penetration NA
Leamer’s intervention index -
Years open 1950–1990 +
Openness indices (growth) +
Openness indices (level) +
Outward orientation Mixed
Liberalization NA

Trade statistics
Fraction of export/import/total trade in GDP +
Fraction of primary products in total exports -
Growth in export–GDP ratio +
FDI inflows relative to GDP NA
Machinery and equipment imports +

Volatility of shocks
Growth innovations -

War
Casualties per capita -

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