Modelling infrastructure as an international public good in a two-country model of trade where each country's social planner behaves strategically, we show that, in general, the equilibrium levels of infrastructure are not optimal from a global perspective. Utilizing an appropriate econometric...

We introduce infrastructure as a cost-reducing technology in Romer's (1987) model of endogenous growth. We show that infrastructure can promote specialization and long-run growth, even though its reflects on the latter is non-monotonic, reflecting its resource costs. We provide evidence using...