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Infrastructure, Long-Run Economic Growth And Causality Tests For Cointegrated Panels

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  • DAVID CANNING
  • PETER PEDRONI

Abstract

We investigate the consequences of various types of infrastructure provision in a panel of countries from 1950 to 1992. We develop new tests which enable us to isolate the sign and direction of long-run effects in a manner that is robust to the presence of unknown heterogeneous short-run causal relationships. We show that while infrastructure does tend to cause long-run economic growth, there is substantial variation across countries. We also provide evidence that each infrastructure type is provided at close to the growth-maximizing level on average globally, but is under-supplied in some countries and over-supplied in others. Copyright � 2008 The Authors. Journal compilation � 2008 Blackwell Publishing Ltd and The University of Manchester.

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Bibliographic Info

Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 76 (2008)
Issue (Month): 5 (09)
Pages: 504-527

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Handle: RePEc:bla:manchs:v:76:y:2008:i:5:p:504-527

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