A reassessment of Mankiw, Romer and Weil study

Abstract

In their benchmark study, Mankiw, Romer and Weil (1992) concluded that international income variations are sufficiently explained by augmented Solow model. The aim of this paper is to replicate their empirical study, for the periods 1960-1985, 1960-2019 and 1970-2019. We reassess the textbook and augmented Solow models and we examine for convergence in standards of living by applying the Ordinary Least Squares (OLS). The empirical analysis does not confirm the initial findings of MRW, the results are somehow mixed. Also, a panel data approach on textbook and augmented Solow regression is used to allow differences in aggregate production functions among countries, for the period 1970-2019. In this case, the results are statistically significant and consist a good explanation of income disparities at a global level.