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Structural Change behind GDP Growth Rates via Key Indicators: Chile 1996-2015

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  • J.M. Albala-Bertrand

Abstract

This paper deals with the change of some aggregate structural indicators in Chile over the 20-year period 1996-2015. We first produce an accounting growth decomposition to assess the changes in the contribution of capital productivity, capital intensity and labour participation to the growth rate of output per capita as well as the growth rate of labour income participation in national income. We then combine an accounting growth decomposition with a standard production function growth accounting to assess the contribution of both capital productivity and capital intensity to total factor productivity (TFP). To complement the latter, we produce optimal estimates of incremental capital productivity and incremental income elasticity to capital by means of a linear programming exercise. Our main conclusion is that capital intensity, rather than capital productivity or labour participation, has been the main growth contributor. TFP has contributed in a decreasing way from positive to negative over our sub-periods, so adding to and subtracting from GDP growth over time, with the main positive contributor to TFP growth systematically being a proportion of capital intensity.

Suggested Citation

  • J.M. Albala-Bertrand, 2018. "Structural Change behind GDP Growth Rates via Key Indicators: Chile 1996-2015," International Business Research, Canadian Center of Science and Education, vol. 11(8), pages 38-47, August.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:8:p:38-47
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    References listed on IDEAS

    as
    1. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-980, September.
    2. Hofman, André A., 2000. "The economic development of Latin America in the twentieth century," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1650 edited by Eclac.
    3. Jose Miguel Albala-Bertrand, 2003. "An Economical Approach to Estimate a Benchmark Capital Stock. An Optimal Consistency Method," Working Papers 503, Queen Mary University of London, School of Economics and Finance.
    4. Eric Krassoi Peach & T. Stanley, 2009. "Efficiency Wages, Productivity and Simultaneity: A Meta-Regression Analysis," Journal of Labor Research, Springer, vol. 30(3), pages 262-268, September.
    5. Jose Miguel Albala-Bertrand, 2003. "An Economical Approach to Estimate a Benchmark Capital Stock. An Optimal Consistency Method," Working Papers 503, Queen Mary University of London, School of Economics and Finance.
    6. Jose Miguel Albala-Bertrand, 2007. "Net Capital Stock and Capital Productivity for China and Regions: 1960-2005. An Optimal Consistency Method," Working Papers 610, Queen Mary University of London, School of Economics and Finance.
    7. J. M. Albala-Bertrand, 2010. "A contribution to estimate a benchmark capital stock. An optimal consistency method," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(6), pages 715-729.
    8. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    structural change; incremental capital productivity; growth decomposition; optimal consistency method (OCM); total factor productivity (TFP);
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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