Growth, increasing returns, and public infrastructure : time series evidence
Initial endogenous growth models emphasized the importance of external effects and increasing retums in explaining growth. Empirically, this hypothesis can be confumed if the coefficient of physical capital per hour is unity in the aggregate production function. Previous estimates using time series data rejected this hypothesis, although cross-country estimates did nol The problem lies with the techniques employed, which are unable to capture low-frequency movements of high-frequency data. Using cointegration, new time series evidence confum the theory and conform to cross-country evidence. The implied Solow residual, which takes into account externaI effects to aggregate capital, has its behavior analyzed. The hypothesis that it is explained by government expenditures on infrasttucture is confIrmed. This suggests a supply-side role for government affecting productivity.
Year of publication: |
1995-03
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Authors: | Ferreira, Pedro Cavalcanti ; Issler, João Victor |
Institutions: | FGV/EPGE Escola Brasileira de Economia e Finanças, Fundação Getulio Vargas (FGV) |
Saved in:
freely available
Extent: | application/pdf |
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Series: | Economics Working Papers (Ensaios Economicos da EPGE). - ISSN 0104-8910. |
Type of publication: | Book / Working Paper |
Notes: | Number 258 |
Source: |
Persistent link: https://www.econbiz.de/10005009340
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