Journal of Economic Growth

, Volume 6, Issue 3, pp 205–227 | Cite as

Public Capital and Economic Growth: A Convergence Approach

  • Etsuro Shioji
Article

Abstract

This paper estimates dynamic effects of public capital on output per capita. Based on an open economy growth model, I derive a version of the income convergence equation augmented with public capital. This equation is estimated using panel data of United States and Japanese regions. Sensible results are obtained when public capital is disaggregated into components. In both countries, the infrastructure component of public capital turns out to have significantly positive effects. The implied elasticity of output with respect to infrastructure is somewhere around 0.1 to 0.15. This suggests a modest contribution of infrastructure to postwar growth of the two countries.

economic growth income convergence public capital panel data GMM 

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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Etsuro Shioji
    • 1
  1. 1.Department of EconomicsYokohama National UniversityHodogaya-ku, YokohamaJapan

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