جديد الاقتصاد
Volume 1, Numéro 1, Pages 32-47
2006-12-31
Explanations And Forecasts Using Cross-country Regressions
Authors : Francisco A. Gallego .
Abstract
This paper uses the approach presented in loayza et al.(2005) to analyze the performance of per-capita GDP growth of Algeria. This approach links the performance of a country to a group of economic, social, and political variables. This paper uses these estimates to both explain the per-capita growth performance of Algeria and forecast future per-capita growth rates under some alternative scenarios. As a benchmark, the paper also presents growth explanations and forecasts for Egypt, morocco, and Tunisia. The main results suggest that the growth determinants. Similarly, differences in growth performance with Tunisia- the rising star of the region-can be explained by differences in the growth determinants. Regarding forecasts, the estimated models suggest in that if Algeria continues with the current trends in its growth decrease to around 1.1% per year- equivalent to average GDP growth between 2.6 and 2.8% per year. Interestingly, however, Algeria has big room to improve its growth performance if it moves to the top 40% of the world distribution of the determinants of economic growth. Financial development would have the bigger contribution and government burden, trade openness, cyclical stability, and public infrastructure can also contribute significantly.
Keywords
Keywords: growth ,financial development, trade
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