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Infrastructure, Specialisation and Economic Growth

Listed author(s):
  • Panicos O. Demetriades
  • Spiros Bougheas

We introduce infrastructure as a cost-reducing technology in Romer's (1987) model of endogenous growth. We show that infrastructure can promote specialization and long-run growth, even though its effect on the latter is non-monotonic, reflecting its resource costs. We provide evidence using data from the U.S. Census of Manufactures that suggests that the degree of specialization is positively correlated with core infrastructure, as predicted by the model. We also provide evidence from cross-country regressions, using physical measures of infrastructure provision, that shows a robust non-monotonic relationship between infrastructure and growth.

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Paper provided by Department of Economics, Keele University in its series Keele Department of Economics Discussion Papers (1995-2001) with number 95/15.

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Date of creation: 1995
Publication status: Published in Canadian Journal of Economics, Vol. 33, No. 2, May 2000, 506-522.
Handle: RePEc:kee:keeldp:95/15
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Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom

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Order Information: Postal: Department of Economics, Keele University, Keele, Staffordshire ST5 5BG - United Kingdom
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