MODELING GROWTH (AND LIBERALIZATION) USING SMOOTH TRANSITIONS ANALYSIS |
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| Authors: | DAVID GREENAWAY STEPHEN LEYBOURNE DAVID SAPSFORD |
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| Affiliation: | Department of Economics, University of Nottingham, England, Phone 44–115-951-5469, Fax 44–115-951-5552, E-mail;Department of Economics, University of Nottingham, England, Phone 44–115-951-5478, Fax 44–115-951-4159, E-mail;Department of Economics, University of Lancaster, England, Phone 44–1524-594-234, Fax 44–1524-594-244, E-mail |
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| Abstract: | Economic liberalization has been a pervasive phenomenon over the last twenty years. Programs have been initiated on the assumption that liberalization promotes economic growth, but the empirical evidence for this is limited. This paper takes a novel approach to modeling growth and structural change as smooth transitions. This allows us to model deterministic change without imposing discrete changes. We use smooth transition analysis to reappraise the time-series properties of long-run growth rates in a number of developing countries which have undertaken liberalization. Our results challenge conventional wisdom on both methodological and empirical grounds. |
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