Investment-specific technical change (ISTC) contributes little to growth in most countries. This is because in many countries the investment process does not become notably more efficient over time. Still, cross-country differences in the contribution of ISTC to growth are significant. Differences in the rate of ISTC appear due to cross-country variation in the use of R&D intensive capital goods, as well as trade costs.
Price of capital, investment-specific technical change, growth accounting, sources of growth, natural resources, trade costs.
Samaniego, Roberto M and SUN, Juliana Yu.
Investment-Specific Technical Change and Growth around the World. (2016). Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1849
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