A CROSS-SECTION MODEL OF ECONOMIC GROWTH RE-EXAMINED.

The article presents a critique on a cross-section model of economic growth given by researchers P.M. Sommers and D.B. Suits. Out of all the relationships which could be chosen to characterize economic growth, authors Sommers and Suits in their paper select three for their model. They find their model shows "significant statistical relationships among the basic elements of economic growth and describes the broad outlines of the relationships among them. One of their major results is that the rate of growth of per capita gross national product eventually goes to zero in their model and per capita income no longer increases. One of the first questions that comes to mind in models of this kind is the extent of specification error. A question of interest to the readers is how sensitive are the results of Sommers and Suits to plausible though comparatively small changes in their model. The authors have found that a modification of the form of one of the relationships that actually improves the goodness of fit reverses their major result.