Bayesian and frequentist modelling of West African economic growth: a dynamic panel approach

Nureni Olawale Adeboye; Olumide Sunday Adesina

doi:https://doi.org/10.59139/stattrans-2025-029

Bayesian and frequentist modelling of West African economic growth: a dynamic panel approach

Nureni Olawale Adeboye Corresponding Author. Department of Statistics, Faculty of Basic and Applied Sciences, Osun State University, Osogbo, Osun State, Nigeria ORCID:https://orcid.org/ 0000-0002-8023-221X , Olumide Sunday Adesina School of Computing and Sciences, Nigerian University of Technology and Management, Apapa, Lagos, Nigeria & Johannesburg Business School, University of Johannesburg, South Africa ORCID:https://orcid.org/0000-0003-1476-8080 Statistics in Transition new series, vol. 26, 2025, 3, pages: 99-115 Published online: 5 September 2025 https://doi.org/10.59139/stattrans-2025-029 Citation: Adeboye N.O., Adesina O.A., 2025. Bayesian and frequentist modelling of West African economic growth: a dynamic panel approach. Statistics in Transition new series, 26(3), pp. 99-115 https://doi.org/10.59139/stattrans-2025-029

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ABSTRACT

The empirical outcomes of previous studies examining the relationship between economic growth and socio-economic indicators have been inconclusive and conflicting. To further probe into the study area, the current research employed a dynamic panel model estimated via three robust dynamic panel data estimators of the generalized method of moment (GMM), frequentist instrumental variable (IV) and the Bayesian IV on real and simulated data. Various model performance criteria such as Wald statistics, leave-out-one crossvalidation and the Pareto k checks were used for validity verification. The results of the robust diagnostics checks and a model strength metric showed that the family of IV models outperformed the GMM. Thus, the estimation provided by the Bayesian IV is upheld and recommended in modelling dynamic panel data as it provides robust estimates of the parameters of interest.

KEYWORDS

dynamic panel data, economic growth, generalized method of moment, instrumental variable, socio-economic indicators

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