Artikel
Spurious regressions and near-multicollinearity, with an application to aid, policies and growth
In multiple regressions, explanatory variables with simple correlation coefficients with the dependent variable below 0.1 in absolute value (such as aid/gross domestic product (GDP) with GDP growth) face a problem of parameter identification. They may have very large, statistically significant, estimated parameters which are unfortunately "outliers driven" and spurious. This is obtained by including another regressor which is highly correlated with the initial regressor, such as a lag, a square or interaction terms of this regressor. The analysis is applied on the "Gambia and Botswana outliers driven" Burnside and Dollar [2000] article which found that aid/GDP had an effect on growth only for countries achieving "good" macroeconomic policies.
- Language
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Englisch
- Bibliographic citation
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Journal: Journal of macroeconomics ; ISSN: 0164-0704 ; Volume: 39 ; Year: 2014 ; Issue: A ; Pages: 85-96 ; Amsterdam: Elsevier
- Classification
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Wirtschaft
Hypothesis Testing: General
International Linkages to Development; Role of International Organizations
Other Economic Systems: International Trade, Finance, Investment and Aid
- Subject
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spurious regression
identification
hypothesis testing
near-multicollinearity
conditional independence
foreign aid
economic growth
economic growth
identification
hypothesis testing
near-multicollinearity
conditional independence
foreign aid
spurious regression
- Event
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Geistige Schöpfung
- (who)
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Chatelain, Jean-Bernard
Ralf, Kirsten
- Event
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Veröffentlichung
- (who)
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Elsevier
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
- (where)
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Amsterdam
- (when)
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2014
- DOI
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doi:10.1016/j.jmacro.2013.11.003
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Chatelain, Jean-Bernard
- Ralf, Kirsten
- Elsevier
- ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Time of origin
- 2014
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Spurious Weather Effects
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On aid, growth, and good policies
Mean volatility regressions
Unconditional Quantile Regressions