Distinguishing between potential sources of growth convergence for the Portuguese economy within the EU. A panel data - time series study of the aggregate production function

Marta Cristina Nunes Simões and Maria Adelaide Duarte
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Marta Cristina Nunes Simões: Faculty of Economic, University of Coimbra

Economics Working Papers from University of Évora, Department of Economics (Portugal)

Abstract: What are the potential sources of growth and how is the convergence process of the Portuguese economy within the EU characterised? We answer this question by determining the most suitable specification of the aggregate production function, CES or Cobb-Douglas, for the EU countries as in Duffy&Papageorgiou (2000). If the aggregate production technology is best described by a CES production function then the potential sources of growth are wider than the ones associated with a Cobb-Douglas technology. For instance, with an elasticity of substitution between inputs greater than one (ó>1) it is possible to have endogenous growth (see Jones&Manuelli (1990), Rebelo (1991)) while for ó 1, it is possible to have endogenous growth although the characterisation of our series does not allow us to ignore the spurious regression problem.

Keywords: Economic growth; endogenous growth; multiple equilibriums; CES production technology; Cobb-Douglas production technology; human capital; panel data; time series data; cointegration in panel data (search for similar items in EconPapers)
Pages: 23 pages
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:evo:wpecon:7_2003

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