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Is Newer Better? Penn World Table Revisions and the Growth Literature

Author

Listed:
  • William Larson

    (George Washington University)

  • Chris Papageorgiou

    (IMF)

  • Arvind Subramania

    (Peterson Institute and John Hopkins)

  • Simon Johnson

    (MIT)

Abstract
Versions 6.1 and 6.2 of Penn World Tables (PWT) have essentially the same methodology and the same underlying data, but report significantly different growth numbers. It is not the case that 6.2 is better or worse than 6.1; it is inherent in the PWT approach that some data will vary a great deal across versions and there is no way to determine which of the existing versions is “best”. We examine 13 leading studies of growth for “Table Invariant” results that are robust across different versions of PWT. Table Invariant results are common in studies examining cross-sectional or very long run data; in contrast, results based on higher frequency data are less likely to be robust in this sense, and annual data are particularly problematic. This lack of robustness can be attributed in part to poor data quality in lower income countries, which has been flagged in the Tables’ own health warnings. The lack of robustness is also due to the PWT’s methodology for constructing and compiling the data. This methodology renders data for countries with relatively small total GDP and data distant from the current benchmark year especially variable. We propose an alternative way to use PWT data that might be less prone to some of these issues.

Suggested Citation

  • William Larson & Chris Papageorgiou & Arvind Subramania & Simon Johnson, 2009. "Is Newer Better? Penn World Table Revisions and the Growth Literature," 2009 Meeting Papers 858, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:858
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    References listed on IDEAS

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    3. UEDA Kenichi & Stijn CLAESSENS, 2016. "Monopoly Rights and Economic Growth: An inverted U-shaped relation," Discussion papers 16093, Research Institute of Economy, Trade and Industry (RIETI).
    4. Jerven, Morten, 2016. "Discrepancies: Why Do GDP Growth Rates Differ?," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 6(1), July.
    5. Umaña-Aponte, Marcela & Bhalotra, Sonia R., 2012. "Women's Labour Supply and Household Insurance in Africa," WIDER Working Paper Series 066, World Institute for Development Economic Research (UNU-WIDER).
    6. Francesco Ricci & Marios Zachariadis, 2013. "Education Externalities on Longevity," Economica, London School of Economics and Political Science, vol. 80(319), pages 404-440, July.
    7. Morten Jerven, 2013. "Comparability of GDP estimates in Sub-Saharan Africa: The effect of Revisions in Sources and Methods Since Structural Adjustment," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 16-36, October.
    8. Christian Bjørnskov & Pierre-Guillaume Méon, 2015. "The productivity of trust," Post-Print CEB, ULB -- Universite Libre de Bruxelles, June.
    9. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    10. Claessens, Stijn & Ueda, Kenichi, 2020. "Basic Employment Protection, Bargaining Power, and Economic Outcomes," Journal of Law, Finance, and Accounting, now publishers, vol. 5(2), pages 179-229, September.
    11. Sonia Bhalotra & Marcela Umaña-Aponte, 2010. "The Dynamics of Women’s Labour Supply in Developing Countries," The Centre for Market and Public Organisation 10/235, The Centre for Market and Public Organisation, University of Bristol, UK.
    12. Maxim L. Pinkovskiy, 2017. "Growth discontinuities at borders," Journal of Economic Growth, Springer, vol. 22(2), pages 145-192, June.
    13. John M. Piotrowski & Mr. Rabah Arezki & Reda Cherif, 2009. "Tourism Specialization and Economic Development: Evidence from the UNESCO World Heritage List," IMF Working Papers 2009/176, International Monetary Fund.
    14. Marcela Umaña-Aponte & Sonia Bhalotra, 2012. "Women's Labour Supply and Household Insurance in Africa," WIDER Working Paper Series wp-2012-066, World Institute for Development Economic Research (UNU-WIDER).
    15. Francesco Ricci & Marios Zachariadis, 2013. "Education Externalities on Longevity," Economica, London School of Economics and Political Science, vol. 80(319), pages 404-440, July.
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    17. Jacob Assa & Ingrid H. Kvangraven, 2018. "Imputing Away the Ladder: Implications of Changes in National Accounting Standards for Assessing Inter-country Inequalities," Working Papers 1813, New School for Social Research, Department of Economics.

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