Growth, Government Policies and Institutions in the Globalized World Economy

I. Introduction 2

II. Total Factor Productivity (TFP) 11
1.    Literature on TFP: Innovation, Globalization, Government Policies and Institutions 11
2. Data on Total Factor Productivity 17
3. Level Accounting: Comparison of TFP levels 19
4. Growth Accounting: Comparison of TFP Growth 22

III. Econometric Analysis of TFP Growth 24
1. The Benchmark Framework 24

IV. International Trade and Financial Integration 30
1. Trade and TFP Growth 30
2. Data on Trade 31
3. Regression Results on International Trade 33
4. International Financial Integration (or Financial Openness) 38
5. Regression Results on International Financial Integration 40

V. Market Regulations and Quality of Public Institutions on TFP Growth 44
1. Product and Labor Market Regulatory Measures 44
2. Institutional Quality and Social Polarization 52

VI. International Trade and Capital Flows, Regulations, and Institutions 57

VII. Globalization, Macroeconomic Volatility, and Macroeconomic Policies 60

VIII. Concluding Remarks 64

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