Calderón, CésarMoral-Benito, EnriqueServén, Luis2012-03-192012-03-192011-06-01https://hdl.handle.net/10986/3446This paper offers an empirical evaluation of the output contribution of infrastructure. Drawing from a large data set on infrastructure stocks covering 88 countries and spanning the years 1960-2000, and using a panel time-series approach, the paper estimates a long-run aggregate production function relating GDP to human capital, physical capital, and a synthetic measure of infrastructure given by the first principal component of infrastructure endowments in transport, power, and telecommunications. Tests of the cointegration rank allowing it to vary across countries reveal a common rank with a single cointegrating vector, which is taken to represent the long-run production function. Estimation of its parameters is performed using the pooled mean group estimator, which allows for unrestricted short-run parameter heterogeneity across countries while imposing the (testable) restriction of long-run parameter homogeneity. The long-run elasticity of output with respect to the synthetic infrastructure index ranges between 0.07 and 0.10. The estimates are highly significant, both statistically and economically, and robust to alternative dynamic specifications and infrastructure measures. There is little evidence of long-run parameter heterogeneity across countries, whether heterogeneity is unconditional, or conditional on their level of development, population size, or infrastructure endowments.CC BY 3.0 IGOAICBANDWIDTHBANK OF SPAINCAPITAL STOCKCONSTANT RETURNS TO SCALECONVERGENCE HYPOTHESISDEFICITSDEPRECIATION RATEDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDYNAMIC ANALYSISECONOMETRIC METHODOLOGYECONOMETRIC THEORYECONOMETRICSECONOMIC ANALYSISECONOMIC DEVELOPMENTECONOMIC DYNAMICSECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC RESEARCHECONOMICS OF INFRASTRUCTUREELASTICITIESELASTICITYELECTRIC POWERELECTRICITYEXCHANGE RATESEXPECTED VALUEFISCAL POLICYFORECASTSFOREIGN ASSETSGDPGENERATIONGENERATION CAPACITYGOVERNMENT EXPENDITURESGOVERNMENT INVESTMENTGOVERNMENT SPENDINGGROWTH MODELGROWTH MODELSGROWTH RATEHOUSINGHUMAN CAPITALINCOMEINCOME DISTRIBUTIONINCOME ELASTICITYINCOME LEVELSINEFFICIENCYINFRASTRUCTURE ASSETSINFRASTRUCTURE CONGESTIONINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE ECONOMICSINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINFRASTRUCTURE PROVISIONINFRASTRUCTURE SECTORINFRASTRUCTURE SERVICESINTERNATIONAL ENERGYINTERNATIONAL ROAD FEDERATIONINVENTORYLAND TRANSPORTMACROECONOMICSMARGINAL PRODUCTMARGINAL PRODUCTIVITYMIDDLE INCOME COUNTRIESMIDDLE INCOME COUNTRYMULTIPLIERSOPEN ACCESSPER CAPITA INCOMEPOLITICAL ECONOMYPRIVATE SECTORPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTION INPUTSPRODUCTIVITYPUBLICPUBLIC EXPENDITUREPUBLIC GOODSPUBLIC INFRASTRUCTUREPUBLIC INVESTMENTPUBLIC POLICIESPUBLIC SECTORPURCHASING POWERRAILWAYRAILWAY NETWORKRAILWAYSREAL GDPROADROAD INFRASTRUCTUREROAD NETWORKROAD SYSTEMROAD TRANSPORTROADSSTATISTICAL ANALYSISTAXATIONTELECOMMUNICATIONSTELECOMMUNICATIONS SERVICESTOTAL FACTOR PRODUCTIVITYTRANSITION ECONOMIESTRANSPORTTRANSPORT INFRASTRUCTUREUNEMPLOYMENTURBAN ECONOMICSWorld Bank10.1596/1813-9450-5682