The role of human and public capital in the Spanish regions growth:a panel

In this work we observe the role of public and human capital through an extended version of the Solow model,and we test its main implication that in the long run growth is only drived by technological progress which is exogenous.We estimate a panel data with fixed effects and we obtain several interesting results.First, we obtain favourable conclusions about the predictive capacity of the Solow model for the Spanish regions and that the main restriction of the model holds.However,we find evidence against the other basic prediction of the Solow model that the long run growth rate is only determined by technological progress that is exogenous.The prin- cipal reason is the observed strong correlation between the growth rates of the labour force and production per worker.We also obtain a relevant role of human capital. Second,we elaborate a measure of the rate of growth of the Total Factor Productivity (TFP)using the Divisia-Tornqvist index and we find that it is independent of the investment in private capital and the growth rate of labour force.Its only appear weakly significant the investment in human and public capital variables.This result could be consistent with the prediction of the Solow model.