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Testing models of growth - a two-sector model of the USA

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  • Shengxiu Zhu
  • Les Oxley

Abstract

The paper makes two contributions to the literature on economic growth. Firstly, a two-sector growth model is extended to consider m -types of capital. Conditions are identified which aid classification of models as either exogenous or endogenous. Secondly, a preliminary empirical application based upon US annual data 1959-1990 finds in favour of 'observational equivalence' of exogenous and endogenous explanations of growth, whereas a 'second-round' of testing suggests weak evidence in favour of an exogenous explanation of growth.

Suggested Citation

  • Shengxiu Zhu & Les Oxley, 2001. "Testing models of growth - a two-sector model of the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 8(5), pages 325-329.
    • Handle: RePEc:taf:apeclt:v:8:y:2001:i:5:p:325-329
    DOI: 10.1080/135048501750157549
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    9. repec:bla:ecorec:v:73:y:1997:i:221:p:125-35 is not listed on IDEAS
    10. Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
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    2. Lach, Łukasz, 2010. "Fixed capital and long run economic growth: evidence from Poland," MPRA Paper 52280, University Library of Munich, Germany.
    3. Alvargonzalez, M. & Lopez, A. & Perez, R., 2004. "Growth-Inequality Relationship. An Analytical Approach and Some Evidence for Latin America," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 4(2).

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