Predicting long-run growth pats using the Solow-like
growth formulas involves and inevitable problem : how to
predict dynamic paths of the respective explanatory variables.
This paper approacher this issue in the following four steps:
1) Estimate the relevant coefficients (elasticities) of
explanatory variables from cross-country regressions;
2) Using cross-country data, estimate the general pattern of
each explanatory variables as a (nonparametric) function
of income per capita;
3) Estimate Korea's country-specific effects in the
4) Using the above estimates, simulate the Korea's and
explanatory variables' paths simultaneously.