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Capital Accumulation and Growth: A New Look at the Empirical Evidence

  • Steve Bond

    (Nuffield College, Oxford University
    IFS)

  • Asli Leblebicioglu

    (North Carolina State University)

  • Fabio Schiantarelli

    ()

    (Boston College
    IZA-Bonn)

We present evidence that an increase in investment as a share of GDP predicts a higher growth rate of output per worker, not only temporarily, but also in the steady state. These results are found using pooled annual data for a large panel of countries, using pooled data for non-overlapping five-year periods, or allowing for heterogeneity across countries in regression coefficients. They are robust to model specifications and estimation methods. The evidence that investment has a long-run effect on growth rates is consistent with the main implication of certain endogenous growth models, such as the AK model.

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Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 591.

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Date of creation: 16 Mar 2004
Date of revision: 02 Aug 2007
Handle: RePEc:boc:bocoec:591
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