A Contribution to the Empirics of Economic Growth

NBER WORKING PAPERS SERIES

A CONTRIBUTION TO THE EMPIRICS OF ECONOMIC GROWTH

N. Gregory Mankiw

David Romer

David N. Weil

Working Paper No. 3541

NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 December 1990

We are grateful to Karen Dynan for research assistance, to Laurence Ball, Olivier Blanchard, Anne Case, Lawrence Katz, Robert King, Paul Romer, Xavier Sala—i—Martin, Amy Saisbury, Robert Solow, Lawrence Summers, Peter Temin, and the referees for helpful comments, and to the National Science Foundation for financial support. This paper is part of NBER's research programs in Economic Fluctuations and Growth. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research.

NBER Working Paper #3541 December 1990

A CONTRIBUTION TO THE EMPIRICS OF ECONOMIC GROWTH

ABSTRACT

This paper examines whether the Solow growth model is consistent with the international variation in the standard of

living. It shows that an augmented Solow model that includes

accumulation of human as well as physical capital provides an

excellent description of the cross—country data. The model

explains about 80 percent of the international variation in income per capita, and the estimated influences of physical—capital accumulation, human—capital accumulation, and population growth

confirm the model's predictions. The paper also examines the

implications of the Solow model for convergence in standards of living-—that is, for whether poor countries tend to grow faster

than rich countries. The evidence indicates that, holding

population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts.

David Roiner

Department of Economics 787 Evans Hall University of California

N. Gregory Mankiw NBER 1050 Massachusetts Avenue Cambridge, MA 02138—5398

Berkeley, CA 94720

David Weil NBER 1050 Massachusetts Avenue Cambridge,...