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

Existing results on fiscal federalism and economic growth are ambiguous. * This paper studies this relation using a Bayesian model averaging approach (BMA). * BMA allows for avoiding biases due to over restrictive model specification. * The analysis is conducted for a panel of 23 OECD countries from 1975 to 2000. * There is no robust positive or negative link between fiscal federalism and growth. 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 avera... Mehr ...