Work

An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model

Year: 2025

Type: article

Abstract: This paper develops an algorithm for the restricted Generalized Method of Moments (RGMM) to re-evaluate the empirical findings of Mankiw, Romer, and Weil (1992), who emphasized the critical role of human capital accumulation in explaining cross-country income differences. Despite the influence of their results, subsequent literature has raised concerns about potential endogeneity arising from omitted variable bias. To address these concerns, we employ a novel instrumental variable strategy - using the algorithm of the restricted Generalized Method of Moments (RGMM). Using the restricted GMM, we find that the original Mankiw, Romer, and Weil (1992) results are robust for the method of estimation and survive the endogeneity criticisms that are present in the literature.

Source: Theoretical and Practical Research in Economic Fields

DOI: 10.14505/tpref.v16.3(35).01

Authors: Arpan CHAKRABORTY, Siddhartha CHATTOPADHYAY, Sohini SAHU

Institutions: Indian Institute of Technology Kharagpur, Indian Institute of Technology Kanpur

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Funders: Jadavpur University, Indian Institute of Technology Kharagpur