01894cas a2200253 a 4500 AALejournalIMF015406 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513555508 1018-5941 BD-DhAAL BD-DhAAL Goes, Carlos. Institutions and Growth : A GMM/IV Panel VAR Approach / Carlos Goes. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (14 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Both sides of the institutions and growth debate have resorted largely to microeconometric techniques in testing hypotheses. In this paper, I build a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years and find support for the institutions hypothesis. Controlling for individual fixed effects, I find that exogenous shocks to a proxy for institutional quality have a positive and statistically significant effect on GDP per capita. On average, a 1 percent shock in institutional quality leads to a peak 1.7 percent increase in GDP per capita after six years. Results are robust to using a different proxy for institutional quality. There are different dynamics for advanced economies and developing countries. This suggests diminishing returns to institutional quality improvements. Mode of access: Internet United States imf IMF Working Papers; Working Paper ; No. 2015/174 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/174/001.2015.issue-174-en.xml IMF e-Library