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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Bibliographic InfoPaper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 004363.
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-19 (All new papers)
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- Carolina Arteaga Cabrales, 2011.
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- 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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- Zuleta, Hernando, 2012. "Variable factor shares, measurement and growth accounting," Economics Letters, Elsevier, vol. 114(1), pages 91-93.
- Hernando Zuleta, 2010. "Participación factorial y contabilidad del crecimiento económico en Colombia .Una propuesta de modificación del método de contabilidad del crecimiento," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
- 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.
- Hernando Zuleta, 2011. "Factor Shares, Income Distribution and Capital Flows," DEGIT Conference Papers c016_003, DEGIT, Dynamics, Economic Growth, and International Trade.
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