Determinants of Growth in an Error: Correction Model for El Salvador

July 1, 1998

Preview Citation

Format: Chicago

Armando Méndez Morales. Determinants of Growth in an Error: Correction Model for El Salvador, (USA: International Monetary Fund, 1998) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

An error-correction model identifies determinants of growth consistent with results from panel regressions based on a standard Cobb-Douglas production function for El Salvador for 1970-1995, with structural factors affecting the technology variable and macroeconomics and expectations explaining the deviations from the long-run trend. Consistency of the parameters is satisfactory, especially considering that half of the sample period was affected by a civil war, 40 percent of the working population migrated to foreign countries during that period, and the rapid process of economic reform after the advent of peace resulted in overlapping structural patterns.

Subject: Education, Foreign exchange, Labor, Labor force, Production, Public expenditure review, Real effective exchange rates, Total factor productivity

Keywords: Capital destruction, Capital stock, Central America, Cobb-Douglas production function, Constant returns to scale, Econometrics, Equation decline, Exchange rate, Growth, Labor force, Labor productivity growth, Log, Per-capita GDP growth, Physical capital, Real effective exchange rates, Total factor productivity, Total factor productivity growth, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/104
Stock No:

WPIEA1041998
ISBN:

9781451947991
ISSN:

1018-5941

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