The OECD 1951-88 growth experience revisited

This paper presents panel data evidence on an investment driven growth process for 16 OECD countries over the 1951-88 period, as it is predicted by new growth theory. Investments are hypothesized to depend on demand factors, human capital, and trade union power. The two-equation regression model appears to replicate the data in a satisfactorily way. In the search for the ultimate factors behind economic growth, this two-step approach seems more appropriate than a purely eclectic one.Economic Growth;Investment;OECD;economic development