Economic Growth and its Determinants: a Longitudinal and a Cross-regional Analysis

Abstract

Empirical evidence from a panel of 177 countries, over the time period of 1995-2009, indicates that economic growth is dependent on various factors. This paper finds that corruption control, reduced inflation and increased trade openness are the factors that boost up the economic growth of a country. Mixed empirical evidence is seen for government consumption, tropical climate and agricultural growth. No significant relationship has been observed between military expenditure and economic growth, whereas democracy influences output for African countries. The cross-regional analysis of Asian, European, African, Caribbean, and American countries also gives specific determinants for these regions. I have also analyzed Economic growth has also been analyzed in developing, developed, least developed, Muslim and petroleum exporting and emerging countries.

Keywords: economic growth, corruption, democracy, government consumption, health, inflation, trade openness, tropical climate, human capital, military expenditure, agricultural growth