Infrastructure, Specialization, And Economic Growth
University of Nottingham - School of Economics
University of Leicester - Department of Economics
Theofanis P. Mamuneas
University of Cyprus - Department of Economics
Canadian Journal of Economics, Vol. 33, Issue 2, May 2000
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 reflects 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.
JEL Classification: O41, O50Accepted Paper Series
Date posted: October 4, 2000
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