RATES, RATIOS AND PER CAPITA VARIABLES IN INTERNATIONAL MODELS: ANALYSIS OF INVESTMENT AND FOREIGN TRADE IN OECD COUNTRIES

Some econometric models try to explain the rate of growth of real Gross Domestic Product per capita as a function or ratios like Investment/GDP or Exports/GDP, often with confusing results and conclusions which are misleading when the studies do not show a positive impact of the explanatory variables. Some of these approaches are inspired in the Solow´s model, which is indeed interesting at a theoretical level when the hypotheses of the model hold in one country for a short period of time. It happens that some hypotheses of the model do not hold for long samples of a same country or in international comparisons. Usually economic growth of real GDP per capital increases with Investment per capita but the Investment/GDP ratio often diminish with the increase of Investment per capita. In the case of these two explanatory variables it is much more convenient and realistic to use real per capita values, instead of ratios, for the explanation of economic development. Besides we include other considerations of interest regarding international differences of Exports per capita among countries. We present data, graphs and estimations of interest in this regard for 25 OECD countries