On the probability distribution of economic growth

Abstract

Normality is often mechanically and without su¢ cient reason assumed in econometric models. In this paper three important and signi…cantly heteroscedastic GDP series are studied. Heteroscedasticity is removed and the distributions of the …ltered series are then compared to a Normal, a Normal-Mixture and Normal-Asymmetric Laplace (NAL) distributions. NAL represents a reduced and empirical form of the Aghion and Howitt (1992) model for economic growth, based on Schumpeter's idea of creative destruction. Statistical properties of the NAL distributions are provided and it is shown that NAL competes well with the alternatives.

Regional patent activity in Russia: does level of risks make a difference?

“…We used regional GDP to control for the overall economic output of the different regions at a point, as well as its economic potential. Following insights from Stockhammar and Öller (2011), we hold that innovation is positively related to GDP growth; in essence, regions with higher levels of innovation will also experience higher levels of GDP. In addition, given the high levels of inflation in the Russian Federation in the time covered by the study (Figure 2), and the relationship between inflation and financial risk, as well as economic risk, we used GDP in smoothing out the effect of inflation on these risk ratings.…”

Effects of US policy uncertainty on Swedish GDP growth

“…Because of this, the heteroscedasticity removing filter of Stockhammar and Öller (2012) will be considered here. 9 The same filter was used in Stockhammar and Öller (2011) prior to the distributional analysis of several GDP series.…”