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MODELING GROWTH (AND LIBERALIZATION) USING SMOOTH TRANSITIONS ANALYSIS
Author(s) -
GREENAWAY DAVID,
LEYBOURNE STEPHEN,
SAPSFORD DAVID
Publication year - 1997
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1997.tb01965.x
Subject(s) - economics , liberalization , economic liberalization , macroeconomics , econometrics , empirical evidence , phenomenon , empirical research , international economics , market economy , mathematics , physics , philosophy , statistics , epistemology , quantum mechanics
Economic liberalization has been a pervasive phenomenon over the last twenty years. Programs have been initiated on the assumption that liberalization promotes economic growth, but the empirical evidence for this is limited. This paper takes a novel approach to modeling growth and structural change as smooth transitions. This allows us to model deterministic change without imposing discrete changes. We use smooth transition analysis to reappraise the time‐series properties of long‐run growth rates in a number of developing countries which have undertaken liberalization. Our results challenge conventional wisdom on both methodological and empirical grounds.