Aid and Income: Another Time-series Perspective

Lof, Matthijs; Mekasha, Tseday Jemaneh; Tarp, Finn

doi:10.1016/j.worlddev.2013.12.015

Cited by 38 publications

(40 citation statements)

References 19 publications

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“…The resulting estimate of A is used to compute the impulse-response functions. Confidence intervals for the impulse-response functions are computed by bootstrap simulation, see Lof et al (2013) for details.…”

Section: Methodsmentioning

confidence: 99%

“…The shocks are identified recursively. To analyze the dynamic relationship between debt and GDP, we compute impulse-response functions from an estimated Panel VAR (PVAR), in a similar manner as Lof et al (2013) assess the relationship between aid and GDP in developing countries. Using the growth rates (log-differences) of real GDP per capita ( Y) and the growth rate of total gross government debt per capita ( D) as our variables of interest, we estimate the following PVAR:…”

Section: Introductionmentioning

confidence: 99%

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Does sovereign debt weaken economic growth? A panel VAR analysis

2014

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We estimate a panel vector autoregressive model to analyze the highly disputed relationship between debt and growth. While several studies indicate that high levels of sovereign debt hamper the growth prospects of a country, our results question this. Using data on 20 developed countries, we find no evidence for a robust effect on debt to growth, even for higher levels of sovereign debt. We do find a significant negative reverse effect of growth to debt, which explains the negative correlation.JEL classification: H63, O43, C33

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does sovereign debt weaken economic growth? A panel VAR analysis

2014

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“…In line with much of the literature, our results show no significant positive effect of aid. Lof, Mekasha, and Tarp (2014) (henceforth LMT) criticize one of our approaches in Nowak- Lehman et al 2012) as unsuitable and for omitting a large number of observations from our sample.…”

Section: Introductionmentioning

confidence: 99%

Comment on Lof, Mekasha, and Tarp (2014)

et al. 2015

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“…In our recent article (Lof, Mekasha, & Tarp, 2014), we replicate the results of Nowak-Lehmann, Dreher, Herzer, Klasen, and Martínez-Zarzoso (2012) and provide two fundamental critical remarks regarding their methodology. First, we revealed that their model is presented in logs, which is not possible as not all variables are strictly positive.…”

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confidence: 56%

Rejoinder to Herzer, Nowak-Lehmann, Dreher, Klasen, and Martinez-Zarzoso (2014)

2015

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The Herzer et al. (2014) comment on our article (Lof et al., 2014) addresses two issues. First, they propose various ways to circumvent our concerns regarding data handling in a paper by Nowak-Lehmann et al. (2012). We point out that under these new approaches the link between the empirical model and theoretical specification no longer holds. Moreover, the issue of reverse causality is not tackled by Herzer et al. (2014). Second, Herzer et al. (2014) criticize our empirical strategy and Panel VAR results. We show their remarks are based on misunderstandings and were, for the most part, already addressed in Lof et al. (2014).

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Aid and Income: Another Time-series Perspective

Cited by 38 publications

References 19 publications

Does sovereign debt weaken economic growth? A panel VAR analysis

Does sovereign debt weaken economic growth? A panel VAR analysis

Comment on Lof, Mekasha, and Tarp (2014)

Rejoinder to Herzer, Nowak-Lehmann, Dreher, Klasen, and Martinez-Zarzoso (2014)

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