HOW STRONGLY DO DEVELOPING-ECONOMIES BENEFIT FROM EQUIPMENT INVESTMENT

We extend and improve the database used in De Long and Summers (1991) and, focusing on developing economies, find that there is a very stron g growth-equipment investment association even when rich industrialize d economies are not considered. Rapid growth is found where equipment investment is low. If there is a region where the post-WWII growth-equ ipment nexus is weak, it is the well-integrated and very rich region o f western Europe - not the developing world.