Abstract
Alfaro, Kalemli-Ozcan, and Volosovych (2008) argue that accounting for differences in institutional quality makes the Lucas Paradox disappear. We show that their key finding is driven by the presence of outliers. Once we control for them, we find that the Lucas Paradox remains.
| Original language | English |
|---|---|
| Pages (from-to) | 183-187 |
| Number of pages | 5 |
| Journal | Economic Letters |
| Volume | 121 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2013 |
Keywords
- capital flows
- institutional quality
- Lucas Paradox
- outliers