Equipment Investment and Economic Growth, Issue 3515
National Bureau of Economic Research, 1990 - Capital investments - 70 pages
Using data from the United Nations Comparison Project and the Penn World Table, we find that machinery and equipment investment has a strong association with growth: over l9 &)?l95 each percent of GDP invested in equipment is associated with an increase in GDP growth of 1/3 a percentage point per year. This is a much stronger association than found between growth and any of the other components of investment. A variety of considerations suggest that this association is causal, that higher equipment investment drives faster growth, and that the social return to equipment investment in well functioning market economies is on the order of 30 percent per year.
What people are saying - Write a review
We haven't found any reviews in the usual places.
association between equipment Barro Botswana Cambridge capital accumulation determinant of growth disaggregated economic growth effective protection rate electrical machinery equation equipmen1 share equipment investment share equipment prices equipment quantities equipment share estimates GDP per worker GDP/wkr growth accounting Growth and Equipment growth rates Harvard University high equipment High Produc1ivi1y Sample high productivity sample increase independent variable industrial international dollars investment and growth investment rates labor force Lagged Lahor larger sample lMM lMM low equipment prices Ml Ml non-electrical machinery OECD Orthogonal outward orientation percent percentage points price of equipment production function productivity growth ra1e rates of equipment regression relationship between equipment relative price residuals return to equipment Romer sample period share of GDP share of inves1men1 social return standard error structures investment Table transportation equipment University Press worker gap worker levels World Bank World Competitiveness Report World Development Report Zambia