Money and growth in a sectoral production function framework

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Abstract
An explicit three-sector (government, exports, and the ‘rest’) production function framework is adopted in an attempt to add to the existing evidence on the empirical determinants of economic growth. The model allows for the employment of three factors of production (capital, labour and money) in each sector. Using combined time-series and cross-section data from developed countries, the strongest conclusion to emerge is the positive relationship between the ‘money’ variable and the growth rate of real output.