Infrastructure, specialization, and economic growth

Spiros Bougheas, Panicos Demetriades () and Theofanis P. Mamuneas ()

Canadian Journal of Economics, 2000, vol. 33, issue 2, pages 506-522

Abstract: 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 effect 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-codes: O41 O50 (search for similar items in EconPapers)
Date: 2000
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Working Paper: Infrastructure, Specialisation and Economic Growth (1995)
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