Revisiting the link between growth and federalism: a Bayesian model averaging approach

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URL:	https://ub-madoc.bib.uni-mannheim.de/34341
URN:	urn:nbn:de:bsz:180-madoc-343415
Document Type:	Working paper
Year of publication:	2013
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	13-049
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: C11 , H70 , O43,
Keywords (English):	Fiscal federalism , economic growth , Bayesian Model Averaging
Abstract:	Following the ambiguous results in the literature aimed at understanding the empirical link between fiscal federalism and economic growth, this paper revisits the question using a Bayesian Model Averaging approach. The analysis suggests that the failure to appropriately account for model uncertainty may have previously led to biased estimates. The results from a sample of 23 OECD countries over 1975-2000 indicate that after controlling for unobserved country heterogeneity, there is no robust link, neither positive, nor negative, between output growth and fiscal federalism (measured as sub-national governments' share of own source tax revenue).

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BASE: Asatryan, Zareh ; Feld, Lars P.

Google Scholar: Asatryan, Zareh ; Feld, Lars P.

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