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Public investment and economic growth

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Author Info

  • R. Milbourne
  • G. Otto
  • G. Voss

Abstract

This article uses an extension of Mankiw, Romer and Weil's augmented Solow-Swan growth model to examine whether public investment has a distinct role as a determinant of economic growth. It considers both the predictions of the model in steady state and in transition to steady state. For the steady state model, there is no significant effect from public investment on the level of output per worker. Using standard ordinary least squares (OLS) methods for the transition model, it observes a significant contribution to economic growth from public investment. When instrumental variables methods are used, however, the associated standard errors are much larger and the contribution of public investment is statistically insignificant.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684022000015883
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 5 ()
Pages: 527-540

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Handle: RePEc:taf:applec:v:35:y:2003:i:5:p:527-540

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Citations

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Cited by:
  1. Ejaz Ghani & Musleh-Ud Din, 2006. "The Impact of Public Investment on Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(1), pages 87-98.
  2. Augustin Kwasi Fosu & Yoseph Yilma Getachew & Thomas Ziesemer, 2012. "Optimal public investment, growth and consumption: evidence from African countries," Brooks World Poverty Institute Working Paper Series 16412, BWPI, The University of Manchester.
  3. Angel de la Fuente, 2010. "Infrastructures and productivity: an updated survey," UFAE and IAE Working Papers 831.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Margaret McKenzie, 2005. "Privatisation and Economic Growth," Economics Series 2005_21, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  5. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, 04.
  6. Bertarelli Silvia, 2006. "Capitale pubblico e crescita: una sintesi critica," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
  7. Halkos, George & Tzeremes, Nickolaos, 2011. "Examining the influence of access to improved water and sanitation sources on countries’ economic efficiency," MPRA Paper 30099, University Library of Munich, Germany.
  8. Straub, Stephane, 2008. "Infrastructure and development : a critical appraisal of the macro level literature," Policy Research Working Paper Series 4590, The World Bank.
  9. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," ESE Discussion Papers 179, Edinburgh School of Economics, University of Edinburgh.
  10. Edward Anderson, 2007. "Travel and communication and international differences in GDP per capita," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(3), pages 315-332.
  11. World Bank, 2007. "Ethiopia - Accelerating Equitable Growth : Country Economic Memorandum, Part 2. Thematic Chapters," World Bank Other Operational Studies 7866, The World Bank.
  12. Bayraktar, Nihal & Fofack, Hippolyte, 2007. "Specification of investment functions in Sub-Saharan Africa," Policy Research Working Paper Series 4171, The World Bank.
  13. Shi, Hao & Huang, Shaoqing, 2014. "How Much Infrastructure Is Too Much? A New Approach and Evidence from China," World Development, Elsevier, vol. 56(C), pages 272-286.
  14. Cooray, Arusha, 2010. "Do stock markets lead to economic growth?," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 448-460, July.
  15. Chengliang Yan & Liutang Gong, 2009. "Government expenditure, taxation and long-run growth," Frontiers of Economics in China, Springer, vol. 4(4), pages 505-525, December.

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