Private Investment and Economic Growth in Developing Countries

20 Pages Posted: 15 Feb 2006

See all articles by Carmen M. Reinhart

Carmen M. Reinhart

Peter G. Peterson Institute for International Economics; National Bureau of Economic Research (NBER)

Date Written: July 26, 1989

Abstract

Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components of investment. This paper sheds some light on this important issue by formulating a simple growth model that separates the effects of public sector and private sector investment. This model is estimated for a cross-section sample of 24 developing countries, and the results support the notion that private investment has a larger direct effect on growth than does public investment.

JEL Classification: 111

Suggested Citation

Reinhart, Carmen M., Private Investment and Economic Growth in Developing Countries (July 26, 1989). IMF Working Paper, Vol. , pp. 1-20, 1989. Available at SSRN: https://ssrn.com/abstract=884880

Carmen M. Reinhart

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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