Economic growth and the return to capital in developing economies

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14 Citations (Scopus)

Abstract

An important stylized fact of economic growth is that the rate of return to capital is relatively constant across countries and over time. This paper provides an explanation using a model of growth for a developing economy that has a dualistic structure. Three conditions are derived, each of which may account for the observed stability of the return to capital. The results address Lucas' criticism of conventional growth models and support recent growth accounting studies of East Asian economies, which emphasize the role of increased factor inputs.
Original languageEnglish
Pages (from-to)577-594
JournalOxford Economic Papers
Volume51
Issue number4
DOIs
Publication statusPublished - Oct 1999
Externally publishedYes

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