The level and growth effects in the empirics of economic growth

B. Rao and Rukmini Gounder

MPRA Paper from University Library of Munich, Germany

Abstract: Mankiw, Romer and Weil (1992) have extended the Solow (1956) model by augmenting the production function with human capital. Its empirical success is impressive and it showed a procedure to improve the explanatory power of the neoclassical growth model. This paper suggests an empirical procedure to further extend the neoclassical growth model to distinguish between the growth and level effects of shift variables like the human capital. We use time series data from Guatemala to show that while the growth effects of education are small, they are significant and dominate the level effects.

Keywords: Solow Growth Model; Production Function; Shift Variables; Human Capital Level and Growth Effects (search for similar items in EconPapers)
JEL-codes: O15 O30 O47 O54 (search for similar items in EconPapers)
Date: 2007-02-20
New Economics Papers: this item is included in nep-dev and nep-hrm
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1841

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