Replication exercise, week 1: Mankiw, Romer, and Weil (1992 QJE)

I'll be doing these approximately weekly. The plan is to post a paper each Saturday, then post the solution (and a new paper) the following Saturday, and so on. I will try to provide different "levels" of increasing time, difficulty, and/or complexity. Feel free to think up your own extensions as well.

This week we'll start with something simple; think of it as a warm-up. None of the levels are particularly challenging.

The paper

The paper is Mankiw, Romer, and Weil (1992). This paper writes down two versions of the Solow growth model, derives testable predictions from the model, and tests those predictions using cross-country data.

The primary regression specification regresses country-level income per capita on the investment rate, the population growth rate, and the "human capital investment rate," proxied by the fraction of the workforce that is in schooling. I'm assigning this paper first because

1. It's a classic for introductory regression/econometrics courses.
2. The dataset is provided within the paper itself.
3. It actually replicates quite well.

This isn't the world's best paper. There are serious issues with the estimating equations. Nevertheless, it's a nice one to start with.

Level 1

Please use the dataset provided within the paper to replicate as much as you can from Table I and Table II.

Level 2

Please use the dataset provided within the paper to replicate as much as you can from Tables III, IV, V, and VI. Also, replicate Figure I.

Level 3

Please use the Penn World Table or WDI to replicate as much as you can of Table I-VI. Extend the sample as far as possible in time and space. Split the sample however you like, though it would be useful to at least include MRW's "intermediate" and "OECD" samples for direct comparison.

You may have difficulty in reproducing MRW's "school" variable. If necessary, use MRW's equation (12) to produce an alternate human-capital variable that you can use for the human-capital augmented regressions. Use this variable to provide analogues to Table II, V, and VI. Justify your choice of h*.

Level 4

What are some econometric issues with the paper? How would you work around them? (You need not run any regressions; a discussion is sufficient.)

Solution

The solution will be posted as a stickied comment to this thread on 2018-10-13.

A final comment

This is only going to work if people actually contribute / try to solve the exercises.