A semi-endogenous growth model with public factors, imported capital goods, and limited export demand for developing countries

Autor: Jan Simon Hallonsten, Thomas H.W. Ziesemer
Jazyk: angličtina
Rok vydání: 2019
Předmět:
Zdroj: Journal of Applied Economics, Vol 22, Iss 1, Pp 380-402 (2019)
Druh dokumentu: article
ISSN: 1514-0326
1667-6726
15140326
DOI: 10.1080/15140326.2019.1627726
Popis: We build a semi-endogenous growth model for developing countries with non-rivalrous public factors, imported capital goods, and an export demand function. The model exhibits the three-way interaction between public and private investment and trade shown recently in the empirical literature. A parameter for government-investment inefficiency has transitional growth effects distorting between public investment and private capital, consumption, and exports, the latter biasing the terms of trade. Our analysis of a vector error-correction model (VECM) for Trinidad &Tobago shows that additional expenditure for public investment increases output less than taxes decrease per capita consumption and therefore is sub-optimal there. Both temporary and permanent shocks on public investment have level effects supporting semi-endogenous growth modeling and demonstrate that the VECM effects are in line with the logic of the theoretical model; terms of trade are endogenous.
Databáze: Directory of Open Access Journals
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