Is the AK model still alive? The long-run relation between growth and investment re-examined

Dajin Li

Canadian Journal of Economics, 2002, vol. 35, issue 1, 92-114

Abstract: To explore the empirical validity of -type endogenous growth models, the long-run relation between growth and investment is examined. Contrary to Jones's (1995) findings, the broadly measured rate of investment exerts a long-run positive effect on the growth rate. This result is supported by evidence from twenty-four OECD countries, 1950-92, and five major industrialized countries, 1870-1987. The panel-data evidence from OECD countries also supports an extended model based on the Uzawa (1965) / Lucas (1988) two-sector model with transitional dynamics. These findings suggest that the long-run relation between growth and investment is consistent the model.

JEL-codes: O4 (search for similar items in EconPapers)
Date: 2002
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