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Investment-specific technological change and growth accounting

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  • Oulton, Nicholas

Abstract

Greenwood, Hercowitz and Krusell have claimed that the Jorgenson form of growth accounting is conceptually flawed and severely understates the role of technological progress embodied in new capital goods ('embodiment') in explaining US growth. To the contrary, in this paper it is shown that in its technology aspects their model is a special case of the Jorgensonian growth-accounting model. What they call investment-specific technological change is shown to be closely related to the more familiar concept of TFP growth: statements about the one can be translated into statements about the other. Empirically, they claim that the proportion of US growth accounted for by embodiment is about twice as large as estimated by conventional growth accounting. But the difference between these estimates is found to be due more to data than to methodology.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 54 (2007)
Issue (Month): 4 (May)
Pages: 1290-1299

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Handle: RePEc:eee:moneco:v:54:y:2007:i:4:p:1290-1299

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Web page: http://www.elsevier.com/locate/inca/505566

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References

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  1. Scott, Maurice, 1990. "Extended Accounts for National Income and Product: A Comment," Journal of Economic Literature, American Economic Association, vol. 28(3), pages 1172-79, September.
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  8. Karl Whelan, 2001. "A two-sector approach to modeling U.S. NIPA data," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2001-04, Board of Governors of the Federal Reserve System (U.S.).
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  22. Nicholas Oulton, 2004. "Productivity Versus Welfare; Or GDP Versus Weitzman's NDP," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 329-355, 09.
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Citations

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Cited by:
  1. Nicholas Oulton, 2007. "Jeremy Greenwood and Per Krusell, "Growth Accounting with Investment-Specific Technological Progress: A Discussion of Two Approaches" A Rejoinder," CEP Discussion Papers dp0802, Centre for Economic Performance, LSE.
  2. Dale W. Jorgenson, 2012. "The World KLEMS Initiative," International Productivity Monitor, Centre for the Study of Living Standards, Centre for the Study of Living Standards, vol. 24, pages 5-19, Fall.
  3. Nicholas Oulton, 2002. "ICT and Productivity Growth in the United Kingdom," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 363-379.
  4. Alessio Moro & Galo Nuño, 2011. "Does TFP drive housing prices? a growth accounting exercise for four countries," Banco de Espa�a Working Papers 1133, Banco de Espa�a.
  5. Moro, Alessio & Nuño, Galo, 2012. "Does total-factor productivity drive housing prices? A growth-accounting exercise for four countries," Economics Letters, Elsevier, vol. 115(2), pages 221-224.
  6. Nicholas Oulton, 2013. "Medium and long run prospects for UK growth in the aftermath of the financial crisis," Discussion Papers 1307, Centre for Macroeconomics (CFM).
  7. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
  8. Molinari, Benedetto & Rodríguez, Jesús & Torres, José L., 2013. "Growth and technological progress in selected Pacific countries," Japan and the World Economy, Elsevier, Elsevier, vol. 28(C), pages 60-71.
  9. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2008. "Investment-Specific Technological Change, Investment Sectoral Allocation and Human Capital Accumulation in a Model of Export-Led Growth," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting], ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of G 200807211332520, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  10. Nicholas Oulton, 2010. "Long Term Implications of the ICT Revolution: Applying the Lessons of Growth Theory and Growth Accounting," CEP Discussion Papers dp1027, Centre for Economic Performance, LSE.
  11. Greenwood, Jeremy & Krusell, Per, 2007. "Growth accounting with investment-specific technological progress: A discussion of two approaches," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(4), pages 1300-1310, May.
  12. Oulton, Nicholas, 2007. "Investment-specific technological change and growth accounting," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(4), pages 1290-1299, May.
  13. Dale Jorgenson & Mun Ho & Jon Samuels, 2011. "Information technology and U.S. productivity growth: evidence from a prototype industry production account," Journal of Productivity Analysis, Springer, vol. 36(2), pages 159-175, October.
  14. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2012. "Capital-Specific Technological Change and Human Capital Accumulation in a Model of Export-Led Growth," PSL Quarterly Review, Economia civile, Economia civile, vol. 65(262), pages 275-311.
  15. Jorge Durán & Omar Licandro & Luis A. Puch, 2006. "Sobre la medición del crecimiento económico en presencia de progreso técnico incorporado," Working Papers 2006-24, FEDEA.

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