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

  • Stephen Bond
  • Asli Leblebicioglu

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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File URL: http://www.nuff.ox.ac.uk/economics/papers/2004/w8/Tempblsgrowth17march.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 2004-W08.

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Date of creation: 01 Mar 2004
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Handle: RePEc:oxf:wpaper:2004-w08
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