Revisiting Solow’s Decomposition of Economic and Productivity Growth
AbstractBy relaxing the two assumptions of constant returns to scale and perfect competition in the product market used by Solow (1957), this paper identifies a new decomposition of economic and productivity growth. The sources of economic growth are; adjusted economies of scales effect, weighted sum of input growth, and technical progress. The sources of productivity growth are; adjusted economies of scale effect and technical progress. The weight used for the input growth is the cost share of each input.
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Bibliographic InfoPaper provided by Ball State University, Department of Economics in its series Working Papers with number 200805.
Length: 12 pages
Date of creation: Dec 2008
Date of revision: Dec 2008
Solow; Growth decomposition; Total factor productivity; Returns to scale;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-17 (All new papers)
- NEP-EFF-2009-01-17 (Efficiency & Productivity)
- NEP-FDG-2009-01-17 (Financial Development & Growth)
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