Catching Up or Falling Behind? The Effect of Infrastructure Capital on Technology Adoption in Transition Economies
AbstractThis paper demonstrates that a link between infrastructure capital and productivity growth can lead to multiple balanced growth equilibria if one accounts for the endogenous provision of infrastructure. Starting with the contribution of Barro (1990), the literature on infrastructure and growth mainly focuses on the relation between private and public capital investments. In contrast, we focus on the relationship between the provision of infrastructure capital and a country's innovative capacity. This is consistent with recent empirical evidence that reports a positive link between the two variables. The framework leads to bivariate causality between the rate of technical change and the provision of infrastructure services and generates scope for multiple strictly positive balanced growth equilibria.
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Bibliographic InfoPaper provided by Economic and Social Research Institute (ESRI) in its series Papers with number DYNREG27.
Length: 23 pages
Date of creation: Feb 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-PBE-2008-11-18 (Public Economics)
- NEP-TRA-2008-11-18 (Transition Economics)
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