Sources of Growth Revisited: The Importance of the Nature of Technological Progress
Journal of Applied Economics, Volume 17, Issue 1, Pages 31-62, May 2014
Posted: 13 Jun 2016
Traditional sources of growth studies generally assume that the nature of technological progress is Hicks-neutral. However, the nature of technological progress compatible with steady state conditions is Harrod-neutral rather than Hicks-neutral. This study thus investigates sources of growth for Hong-Kong, the Republic of Korea, Singapore and Taiwan using the bounds testing procedure of Pesaran, Shin and Smith (2001) and the autoregressive distributed lag (ARDL) approach of Pesaran and Shin (1999). The robustness of the test results and parameter estimates are also justified by the fully modified ordinary least squares approach of Phillips and Hansen (1990). The results emphasize that the fundamental source of economic growth is technological progress in the short-run.
Keywords: Economic Growth, Technological Progress, The Bounds Testing Approach, ARDL, FM-OLS
JEL Classification: O30, O47, O57, C22
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