New evidences on the link between public capital and economic growth from a small island economy

Jameel Khadharoo and Boopen Seetanah

No 331454, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The contribution of public capital on economic growth has been the focus of only few studies and has to date focused mainly on developed countries. Moreover it is only lately that the link has been analysed in a dynamic framework, allowing for feedback effects. The empirical literature has hardly dealt with small economies such as Mauritius. The present paper builds on a production function approach, using a unique time series dataset over the period 1950 – 2000, to derive the association between public capital and economic performance and economic growth for Mauritius. Given the non-stationary characteristics of the data, a vector-error-correction mechanism (VECM) is used to model the dynamics. Public capital is shown to have significantly contributed to Mauritian economic performance. Moreover results suggest that there may be indirect effects via private capital accumulation as well.

Keywords: Public Economics; International Development (search for similar items in EconPapers)
Pages: 22
Date: 2006
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331454

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