Public Capital Spillovers and Growth: A Foray Downunder

Timothy Kam () and Yi-Chia Wang ()

ANUCBE School of Economics Working Papers from Australian National University, College of Business and Economics, School of Economics

Abstract: We extend the deterministic growth model of Glomm and Ravikumar (1994) to a stochastic endogenous growth model which nests both exogenous and endogenous growth factors. By introducing simple shocks to production technology, private capital and public capital investment, we can derive testable time series properties of the analytical model. The hypothesis of strict endogenous growth due to public capital spillovers cannot be statistically rejected for our Australian data set. We find further short-run evidence of public capital contributing to permanent increases in the levels of per capita income and private capital.

JEL-codes: O41 C32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-dge
Date: 2006-09
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