The sources of economic growth in the Basque Country, Navarre and Spain during the period 1986-2004
This paper studies the sources of economic growth in the Basque Country and its three historic territories (Araba, Bizkaia and Gipuzkoa), Navarre, and Spain during 1986-2004, emphasizing the role of infrastructures and Information and Communication Technologies (ICT) on growth, and comparing the results with those of the EU and the US. First, the growth rate of output was higher in Navarre and Spain than in the US, and much higher than in the EU. The Basque Country exhibited a better performance only during 1995-2004. Second, labor and capital were the main engines of output growth. The growth in TFP was residual and even declining in the period 1995-2004 due to the increasing contribution of labor. Those results contrast with the pattern for the US especially, where growth in TFP remained substantial. Third, infrastructures contributed approximately 0,10% to output growth. Fourth, the contribution of ICT capital to output growth was around 0,35% and it increased in the period 1995-2004. However, it is still far from the levels for the EU and especially the US. Finally, the growth rate of output per hour was above 1,20%, while the Basque Country lagged behind. Growth in capital intensity was the main source of labor productivity growth. While the contribution of infrastructures to the growth rate of output per hour declined in the period 1995-2004, that of ICT capital increased. Nevertheless the contribution of ICT capital to the growth rate of output per hour remains behind that for the EU and the US.
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