MODEL PRIORS REVISITED: INTERACTION TERMS IN BMA GROWTH APPLICATIONS
Article first published online: 11 NOV 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Journal of Applied Econometrics
Volume 29, Issue 2, pages 344–347, March 2014
How to Cite
Moser, M. and Hofmarcher, P. (2014), MODEL PRIORS REVISITED: INTERACTION TERMS IN BMA GROWTH APPLICATIONS. J. Appl. Econ., 29: 344–347. doi: 10.1002/jae.2365
- Issue published online: 7 MAR 2014
- Article first published online: 11 NOV 2013
- Manuscript Revised: 3 SEP 2013
- Manuscript Received: 26 NOV 2012
- Austrian National Bank. Grant Number: 14663
This paper provides a sensitivity analysis on the prior choice for interaction terms for the results of Masanjala and Papageorgiou (Rough and lonely road to prosperity. Journal of Applied Econometrics 2008; 23: 671–682), which has been criticized for its implementation of interaction terms by Crespo Cuaresma (How different is Africa? Journal of Applied Econometrics 2011; 26: 1041–1047). We find that the discussed priors have similar predictive power and we also evaluate alternative prior solutions that account for the special nature of interaction terms. Copyright © 2013 John Wiley & Sons, Ltd.