Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142520
Authors: 
Rao, B. Bhaskara
Cooray, Arusha
Year of Publication: 
2008
Series/Report no.: 
EERI Research Paper Series 09/2008
Abstract: 
This paper examines a recent view of Pritchett (2006) that there is a wide gap between the theoretical and empirical growth literature and the policy needs of the developing countries. Growth literature has focussed on the long term growth outcomes but policy makers of the developing countries need rapid improvements in the growth rate in the short to medium terms. We think that this gap can be reduced if attention is given to the dynamic effects of policies. With data on Singapore, Malaysia and Thailand we show that an extended version of the Solow (1956) model is well suited for this purpose. We found that the short to medium term growth effects of investment ratio are much higher than its long run effects and persist. Dynamic simulations for Singapore showed that these short and medium run growth effects are significantly higher than the steady state growth rate for up to 10 years.
Subjects: 
Solow Growth Model
Endogenous Growth
Dynamic Growth Effects of Investment Rate
Policies for Developing Countries
JEL: 
O11
Document Type: 
Working Paper

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