An empirical note on factor shares
AbstractIn general, empirical studies on growth consider, at most, three factors, physical capital, labor and human capital. Land, however, is also a production factor for many activities. In this study, we make growth regressions considering land as factor. We also propose an explanation for why labor and capital shares do not seem to have a trend: It is possible that an increasing trend in physical capital share is compensated by a decreasing trend in land share. Similarly, an increasing trend in human capital share may be compensated by a decreasing trend in raw labor share. We find empirical support for the claim that the elasticity of output with respect to reproducible factors, human and physical capital, is positively correlated with the income level. This result has important implications for economic growth theory and for empirical exercises related to economic growth.
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Date of creation: 30 Sep 2007
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Factor Income Shares; Elasticity of output with respect to factors;
Other versions of this item:
- Hernando Zuleta, 2008. "An empirical note on factor shares," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(3), pages 379-390.
- E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
- F0 - International Economics - - General
- O0 - Economic Development, Technological Change, and Growth - - General
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- NEP-ALL-2007-12-19 (All new papers)
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- Laura Liliana Moreno Herrera & Jorge Eduardo Pérez Pérez, 2009. "Biased Technological Change, Impatience and Welfare," DEGIT Conference Papers c014_046, DEGIT, Dynamics, Economic Growth, and International Trade.
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- Brad Sturgill, 2010. "Cross-country Variation in Factor Shares and its Implications for Development Accounting," 2010 Meeting Papers 152, Society for Economic Dynamics.
- Brad Sturgill, 2009. "Cross-country Variation in Factor Shares and its Implications for Development Accounting," Working Papers 09-07, Department of Economics, Appalachian State University.
- JOhn Seater & Pietro Peretto, 2010.
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- Sturgill, Brad, 2012. "The relationship between factor shares and economic development," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 1044-1062.
- Carolina Arteaga Cabrales, 2011.
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- Zuleta, Hernando, 2012. "Variable factor shares, measurement and growth accounting," Economics Letters, Elsevier, vol. 114(1), pages 91-93.
- Andrew T. Young & Hernando Zuleta & Andres Garcia-Suaza, 2010.
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- Andrew T. Young & Hernando Zuleta & Andrés F. García-Suaza, 2010. "Evidence of induced innovation in US sectoral Capital´s shares," DOCUMENTOS DE TRABAJO 006740, UNIVERSIDAD DEL ROSARIO.
- Hernando Zuleta, 2011. "Factor Shares, Income Distribution and Capital Flows," DEGIT Conference Papers c016_003, DEGIT, Dynamics, Economic Growth, and International Trade.
- Zuleta, Hernando, 2009. "If factor shares are not constant then we have a measurment problem. can we solve it?," DOCUMENTOS DE TRABAJO 005744, UNIVERSIDAD DEL ROSARIO.
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