Innovation, Public Capital, and Growth

Pierre-Richard Agenor, Kyriakos Neanidis

Research output: Contribution to journalArticlepeer-review


This paper studies interactions between innovation, public capital, and human capital in an OLG model of endogenous growth. Public capital affects growth not only through productivity, but also through innovation capacity and human capital accumulation. Numerical simulations, based on a calibrated version of the model, are used to illustrate these channels. Panel data regressions are presented next; they show that higher innovation performance promotes growth directly, whereas public capital has both direct and indirect growth effects by promoting human capital accumulation and innovation capacity. Elasticity estimates derived from simultaneous equation techniques show that the general equilibrium effects of public capital on steady-state output per capita (which account for indirect effects) are significantly higher than those derived from single equation methods.
Original languageEnglish
Pages (from-to)252-275
Number of pages23
JournalJournal of Macroeconomics
Early online date9 Apr 2015
Publication statusPublished - 1 Jun 2015


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