This paper investigates the main postulations of the R&D based growth models that innovation is created in the R&D sectors and it enables sustainable economic growth, provided that there are constant returns to innovation in terms of R&D. The analysis employs various panel data techniques and...

Under what conditions should grants be preferred to loans? To answer this question, we present a simple model à la Krugman (1988) and show that, for any given level of developmental assistance, the optimal degree of loan concessionality is positively associated with economic growth if countries...

The objective of this study is to investigate the drivers and constraints of growth and productivity in Guatemala and explore areas with high growth potential. Drawing on the historical growth experience of Guatemala and employing a range of analytical tools, this country analysis aims to...

Although El Salvador's modest pace of growth has reduced poverty and inequality in recent years, it has not been sufficient to move the country toward the income levels of wealthier economies. The objective of this study is to investigate the drivers and constraints of growth and productivity in...

Costa Rica has seen remarkable social and economic progress over the last three decades, with income per capita doubling, and well-being indicators reaching levels comparable with countries of the Organization of Economic Cooperation and Development (OECD). Nevertheless, the country still faces...

Panama's growth model is at crossroads and the country must be prepared for the new growth model. The objective of this study is to investigate the drivers and constraints of growth and productivity in Panama and explore areas with high growth potential. The value added of the study is to...

As the smallest economy in Central America, Nicaragua has undergone a structural transformation that has enabled the country to grow at a high pace since the mid-1990s. The objective of this study is to investigate the drivers and constraints of growth and productivity in Nicaragua and explore...

Despite advances in the growth reform agenda in the last decade, Honduras remains the second-poorest country in Central America, with one of the lowest growth rates in income per capita. The objective of this study is to investigate the drivers and constraints of growth and productivity in...

Central America comprises a diverse set of countries, including two high-middle-income countries (Costa Rica and Panama), two of the poorest countries in Latin America and the Caribbean (Honduras and Nicaragua), and two middle-income economies (Guatemala and El Salvador). Low productivity and...