Working Paper: CEPR ID: DP6382
Authors: Jan Fidrmuc; Ariane Tichit
Abstract: We argue that econometric analyses based on transition countries? data can be vulnerable to structural breaks across time and/or countries. We demonstrate this argument by identifying structural breaks in growth regressions estimated with data for 25 countries and 16 years. Our method allows identification of structural breaks at a-priori unknown points in space or time. The only prior assumption is that breaks occur in relation to progress in implementing market-oriented reforms. We find robust evidence that the pattern of growth in transition has changed at least two times, yielding thus three different models of growth associated with different stages of reform. The speed with which individual countries progress through these stages differs considerably.
Keywords: growth; reform; structural breaks; transition
JEL Codes: O47; P26; P27
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market-oriented reforms (E69) | economic growth (O49) |
| early reform stage (P41) | economic growth (O49) |
| intermediate reform stage (P21) | economic growth (O49) |
| late reform stage (P30) | economic growth (O49) |
| structural breaks (L16) | growth determinants (O41) |
| initial conditions (C62) | economic growth (O49) |