Growth literature and policies for the developing countries
AbstractThis paper examines a recent view of Pritchett (2006) that there is a wide gap between growth literature and the policy needs of the developing countries. Growth literature has focussed on the long term growth outcomes but policy makers of the developing countries need rapid improvements in the growth rate in the short to medium terms. We take the view that this gap can be reduced if attention is given to the dynamic effects of policies. With data on Singapore, Malaysia and Thailand we argue that an extended version of the Solow (1956) model is well suited for this purpose. We found that the short to medium term growth effects of investment rate are much higher than its long run effects. Dynamic simulations for Singapore showed that these short run growth effects are significantly higher than the steady state growth rate for up to 10 years.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10951.
Date of creation: 05 Oct 2008
Date of revision:
Solow Growth Model; Endogenous Growth; Dynamic Growth Effects of Investment Rate; Policies for Developing Countries;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-13 (All new papers)
- NEP-DEV-2008-10-13 (Development)
- NEP-SEA-2008-10-13 (South East Asia)
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