An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model

This paper develops an algorithm for the restricted Generalized Method of Moments (RGMM) to re-evaluate the empirical findings of Mankiw, Romer, and Weil (1992), who emphasized the critical role of human capital accumulation in explaining cross-country income differences. Despite the influence of their results, subsequent literature has raised concerns about potential endogeneity arising from omitted variable bias. To address these concerns, we employ a novel instrumental variable strategy - using the algorithm of the restricted Generalized Method of Moments (RGMM). Using the restricted GMM, we find that the original Mankiw, Romer, and Weil (1992) results are robust for the method of estimation and survive the endogeneity criticisms that are present in the literature.

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Publication Details

Journal
Theoretical and Practical Research in Economic Fields
Published
2025-09-30
DOI
https://doi.org/10.14505/tpref.v16.3(35).01
Primary Topic
Stochastic processes and financial applications
Type
article
Field-Weighted Citation Impact
0.00

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article

An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model

Sohini Sahu, Siddhartha Chattopadhyay, Arpan Chakraborty
Theoretical and Practical Research in Economic Fields
Stochastic processes and financial applications
article

An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model

Sohini Sahu, Siddhartha Chattopadhyay, Arpan Chakraborty
article en

Abstract

This paper develops an algorithm for the restricted Generalized Method of Moments (RGMM) to re-evaluate the empirical findings of Mankiw, Romer, and Weil (1992), who emphasized the critical role of human capital accumulation in explaining cross-country income differences. Despite the influence of their results, subsequent literature has raised concerns about potential endogeneity arising from omitted variable bias. To address these concerns, we employ a novel instrumental variable strategy - using the algorithm of the restricted Generalized Method of Moments (RGMM). Using the restricted GMM, we find that the original Mankiw, Romer, and Weil (1992) results are robust for the method of estimation and survive the endogeneity criticisms that are present in the literature.

Theoretical and Practical Research in Economic FieldsVol. 16(3)
Indian Institute of Technology Kharagpur (IN), Indian Institute of Technology Kanpur (IN)
Jadavpur University, Indian Institute of Technology Kharagpur
Openalex Percentile: Top 66%
Stochastic processes and financial applications
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An Application of the Generalized Method of Moments on the Mankiw-Romer-Weil Model — Sohini Sahu, Siddhartha Chattopadhyay, et al. · Theoretical and Practical Research in Economic Fields (2025) | TGRS Research Map | TGRS