How Useful is Growth Literature for Policies in the Developing Countries?
AbstractThis paper examines the growing gap between the theoretical and empirical growth literature and policy needs of the developing economies. Growth literature has focused mainly on long term growth outcomes, but policy makers of the developing economies need rapid improvements in the short to medium term growth rates; see Pritchett (2006). In this paper we argue that this gap can be reduced by distinguishing between the short to medium term dynamic effects of policies from their long run equilibrium effects. With data from Singapore, Malaysia and Thailand, we show that an extended version of the Solow (1956) model is well suited for this purpose. We find that the short to medium term growth effects of the investment ratio are quite significant and they may persist for up to 10 years.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp09-09.
Length: 39 pages
Date of creation: 2009
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
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More information through EDIRC
Solow Growth Model; Endogenous Growth; Dynamic Growth Effects of Investment Ratio; Policies for Developing Countries.;
Other versions of this item:
- B. Bhaskara Rao & Arusha Cooray, 2012. "How useful is growth literature for policies in the developing countries?," Applied Economics, Taylor & Francis Journals, vol. 44(6), pages 671-681, February.
- Rao, B. Bhaskara & Cooray, Arusha, 2009. "How useful is Growth Literature for Policies in the Developing Countries?," MPRA Paper 14573, University Library of Munich, Germany.
- 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-2009-11-27 (All new papers)
- NEP-DEV-2009-11-27 (Development)
- NEP-FDG-2009-11-27 (Financial Development & Growth)
- NEP-SEA-2009-11-27 (South East Asia)
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