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Distance to Technological Frontier, Market Rigidities, Education, and Growth

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Author Info

  • Philippe Aghion

    (Harvard University, École dÉconomie de Paris, Université de la Méditerranée (Greqam), Banque de France (DEMS) and Université de la Méditerranée (Defi), École dÉconomie de Paris)

  • Philippe Askenazy

    (Harvard University, École dÉconomie de Paris, Université de la Méditerranée (Greqam), Banque de France (DEMS) and Université de la Méditerranée (Defi), École dÉconomie de Paris)

  • Renaud Bourlès

    (Harvard University, École dÉconomie de Paris, Université de la Méditerranée (Greqam), Banque de France (DEMS) and Université de la Méditerranée (Defi), École dÉconomie de Paris)

  • Gilbert Cette

    (Harvard University, École dÉconomie de Paris, Université de la Méditerranée (Greqam), Banque de France (DEMS) and Université de la Méditerranée (Defi), École dÉconomie de Paris)

  • Nicolas Dromel

    (Harvard University, École dÉconomie de Paris, Université de la Méditerranée (Greqam), Banque de France (DEMS) and Université de la Méditerranée (Defi), École dÉconomie de Paris)

Abstract

We exploit panel data on 17 OECD countries for the period 1985-2003. Our main findings are the characterization of the effects of (1) the education level of the workforce and (2) rigidities in the product market and labour market on total factor productivity (TFP) growth. Close to the technological frontier these effects are highly significant and an interaction between the rigidities in the two markets is clearly visible. The strong impact of higher-education level and rigidities on TFP growth appears to reflect a direct influence and an indirect effect via the diffusion of ICTs. In the goods market, the entry barriers, market structure, and degree of vertical integration seem to have a major influence. For countries far from the technological frontier, the higher-education level of the workforce and rigidities in the product market and labour market do not necessarily have a significant impact on TFP growth.

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Bibliographic Info

Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

Volume (Year): 419-420 (2009)
Issue (Month): (August)
Pages: 11-30

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Handle: RePEc:crs:ecosta:es419-420b

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Keywords: Productivity; Growth; Regulations; Market Rigidities; Education;

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References

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  1. Nicholas Crafts, 2006. "Regulation and Productivity Performance," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 186-202, Summer.
  2. Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, Productivity and Growth: OECD Evidence," OECD Economics Department Working Papers 347, OECD Publishing.
  3. Bourles, Renaud & Cette, Gilbert, 2007. "Trends in "structural" productivity levels in the major industrialized countries," Economics Letters, Elsevier, vol. 95(1), pages 151-156, April.
  4. repec:hal:cesptp:halshs-00340409 is not listed on IDEAS
  5. Bruno Amable & Donatella Gatti, 2006. "Labor and product market reforms: questioning policy complementarity," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 101-122, February.
  6. Orszag, Mike & Snower, Dennis J., 1999. "Anatomy of Policy Complementarities," IZA Discussion Papers 41, Institute for the Study of Labor (IZA).
  7. Blanchard, Olivier J & Giavazzi, Francesco, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labour Markets," CEPR Discussion Papers 2713, C.E.P.R. Discussion Papers.
  8. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of policy complementarities," Open Access Publications from Kiel Institute for the World Economy 2252, Kiel Institute for the World Economy (IfW).
  9. Amable, Bruno & Demmouy, Lilas & Ledezma, Ivan, 2008. "Competition, Innovation and Distance to Frontier," Economics Papers from University Paris Dauphine 123456789/6914, Paris Dauphine University.
  10. Bourlès, R. & Cette, G., 2005. "A comparison of Structural Productivity Levels in the Major Industrialised Countries," Working papers 133, Banque de France.
  11. Philippe Aghion & Peter Howitt, 2006. "Joseph Schumpeter Lecture Appropriate Growth Policy: A Unifying Framework," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 269-314, 04-05.
  12. Christopher Gust & Jaime Marquez, 2002. "International comparisons of productivity growth: the role of information technology and regulatory practices," International Finance Discussion Papers 727, Board of Governors of the Federal Reserve System (U.S.).
  13. Paul Conway & Donato de Rosa & Giuseppe Nicoletti & Faye Steiner, 2006. "Regulation, Competition and Productivity Convergence," OECD Economics Department Working Papers 509, OECD Publishing.
  14. repec:fth:iniesr:500 is not listed on IDEAS
  15. Gilbert Cette & Jimmy Lopez, 2008. "What Explains the ICT Diffusion Gap Between the Major Industrialized Countries: An Empirical Analysis?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 28-39, Fall.
  16. Giuseppe Nicoletti & Stefano Scarpetta, 2005. "Regulation and Economic Performance: Product Market Reforms and Productivity in the OECD," OECD Economics Department Working Papers 460, OECD Publishing.
  17. Koeniger, Winfried & Vindigni, Andrea, 2003. "Employment Protection and Product Market Regulation," IZA Discussion Papers 880, Institute for the Study of Labor (IZA).
  18. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR & CES & MSH, vol. 21(45), pages 5-59, 01.
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Cited by:
  1. Gilbert Cette & Jimmy Lopez, 2012. "ICT demand behaviour: an international comparison," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(4), pages 397-410, June.

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