Length 77,000 words.
In this collection of essays, I address some of the major outstanding questions in the empirical study of economic growth. The first chapter examines the existing literature, and includes some discussion of method. The second chapter is an extensive assessment of one of the most important models in the literature, the augmented Solow model due to Mankiw, Romer and Weil. It is shown that a key result (conditional convergence) is sensitive to measurement error, while investigation of the testable implications of the model suggests that it over-simplifies the role of human capital. The chapter also discusses some techniques for robustness testing which are used in several of the later chapters, some for the first time in the growth literature.
Chapters 3 and 4 jointly consider the role of equipment investment, and ask whether this may be particularly important to growth. Chapter 3 provides evidence that the returns to equipment investment are extremely high for developing countries, but also points out that the interpretation is unclear. Chapter 4 uses a theoretical model and further econometric work to explore one interpretation. It is possible that the correlation between growth and equipment investment is driven by industrialization, as a result of which, cross-section regressions will overstate the returns to equipment investment. Some evidence supporting this idea is presented.
Chapter 5 examines the role of social conditions in economic growth. A variety of evidence suggests that a country's level of social development is important to subsequent growth. Regression trees and transition matrices are among the techniques used to investigate the correlation. The results support the view of chapter 2 that rates of technical advance are likely to differ across countries in systematic ways, and suggest that social factors play a role in the speed of catching up by follower countries. This and other conclusions of the thesis are briefly discussed in chapter 6.
Introduction
Chapter 1: The New Growth Evidence
Chapter 2: Testing the augmented Solow model
Chapter 3: Equipment investment and the Solow model
Chapter 4: Human capital, equipment investment and industrialization
Chapter 5: Social capability and economic development
Chapter 6: Conclusions
Internal examiner: Professor Christopher Bliss FBA Nuffield College, Oxford
External examiner: Professor Danny Quah London School of Economics