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Economic Growth: A Channel Decomposition Exercise

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  • Wong Wei-Kang

    ()
    (National University of Singapore)

Abstract

This paper empirically decomposes the channels through which the determinants of growth operate. Methodologically, channel decomposition combines growth accounting with regression analysis. Under channel decomposition, the determinants could affect aggregate productivity growth through physical capital accumulation, through human capital acquisition, or through growth in total factor productivity (TFP). The results from channel decomposition show that TFP growth is the main channel of operation for most of the determinants. Specifically, TFP growth, not factor accumulation, is what accounts for conditional convergence. This finding is extremely robust. There is also no evidence that rich and poor countries converge through different channels.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.

Volume (Year): 7 (2007)
Issue (Month): 1 (January)
Pages: 1-38

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Handle: RePEc:bpj:bejmac:v:7:y:2007:i:1:n:4

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Cited by:
  1. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2007. "Are any Growth Theories Robust?," University of Cyprus Working Papers in Economics 2-2007, University of Cyprus Department of Economics.
  2. Vincenzo Scoppa, 2009. "Technological Catch-Up Or Neoclassical Convergence? Identifying The Channels Of Convergence For Italian Regions," Working Papers 200904, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  3. Frensch, Richard & Gaucaite Wittich, Vitalija, 2009. "Product variety and technical change," Journal of Development Economics, Elsevier, vol. 88(2), pages 242-257, March.
  4. Vollrath, Dietrich, 2008. "Wealth Distribution and the Provision of Public Goods: Evidence from the United States," MPRA Paper 11534, University Library of Munich, Germany.
  5. Wong, Wei-Kang, 2004. "How good are trade and telephone call traffic in bridging income gaps and TFP gaps?," Journal of International Economics, Elsevier, vol. 64(2), pages 441-463, December.
  6. Roberto ESPOSTI, 2008. "Why Should Regional Agricultural Productivity Growth Converge? Evidence from Italian Regions," Working Papers 319, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  7. Hartwig, Jochen, 2012. "Testing the growth effects of structural change," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 11-24.
  8. Silvia Dal Bianco, 2009. "A Reassessment of Italian Regional Convergence through a Non-Parametric Approach," Quaderni di Dipartimento 099, University of Pavia, Department of Economics and Quantitative Methods.

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