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The investment-output ratio in growth regressions

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  • W. Robert
  • J. Alexander

Abstract

The investment-output ratio is often used as a regressor in empirical studies of economic growth, although Scott (1991) is the only serious proponent of its being theoretically appropriate to do so. Evidence is here adduced that when capital stock data are available they ought to be used in preference to investment data. In addition, many growth studies employ population data to proxy, rather poorly, a labour force variable, although no one has ever suggested that this is more than a pis aller. Evidence is presented here that this is an unsatisfactory procedure.

Suggested Citation

  • W. Robert & J. Alexander, 1994. "The investment-output ratio in growth regressions," Applied Economics Letters, Taylor & Francis Journals, vol. 1(5), pages 74-76.
    • Handle: RePEc:taf:apeclt:v:1:y:1994:i:5:p:74-76
    DOI: 10.1080/135048594358177
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    Cited by:

    1. Miguel Ramirez, 2002. "Public capital formation and labor productivity growth in Mexico," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(4), pages 366-379, December.
    2. Ramirez, Miguel D., 2006. "Is foreign direct investment beneficial for Mexico? An empirical analysis, 1960-2001," World Development, Elsevier, vol. 34(5), pages 802-817, May.
    3. Ismail, Mohd Adib & Mawar, Murni Yunus, 2012. "Energy consumption, emissions and economic growth in an oil producing country," MPRA Paper 37535, University Library of Munich, Germany.
    4. Emilio J. Medina-Smith, 2000. "Is The Export-Led Growth Hypothesis Valid For Developing Countries? A Case Study Of Costa Rica," UNCTAD Blue Series Papers 7, United Nations Conference on Trade and Development.
    5. MD. Ramirez, 2000. "Public capital formation and labor productivity growth in Chile," Contemporary Economic Policy, Western Economic Association International, vol. 18(2), pages 159-169, April.
    6. Ramirez, Miguel D., 1998. "Does public investment enhance labor productivity growth in Chile? A cointegration analysis," The North American Journal of Economics and Finance, Elsevier, vol. 9(1), pages 45-65.
    7. Miguel D. Ramirez, 2006. "Does Foreign Direct Investment Enhance Labor Productivity Growth in Chile? A Cointegration Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 32(2), pages 205-220, Spring.
    8. Miguel Ramirez, 2004. "Is public infrastructure spending productive in the Mexican case? A vector error correction analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(2), pages 159-178.

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