This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Impact of Public Capital, Human Capital, and Knowledge on Aggregate Output

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Yasser Abdih
Frederick L. Joutz
Abstract

This paper investigates the impact of public capital on private sector output by testing and estimating an aggregate production function for the U.S. economy over the postwar period augmented to include the stock of public capital as an additional factor input. We use patent applications to proxy for knowledge/technology stocks and adjust labor hours for changes in human capital or skill. Using Johansen's (1988 and 1991) multivariate cointegration analysis, we find a positive and significant long run effect of public capital, private capital, skilladjusted labor, and technology/ knowledge on private sector output. We find that public capital accounts for about half of the post-1973 productivity slowdown, but only plays a minor role in the partial recovery of labor productivity growth since the mid 1980s. The largest contribution to that (partial) recovery comes from the knowledge stock and human capital.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.imf.org/external/pubs/ft/wp/2008/wp08218.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/218.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 48 pages
Date of creation: 15 Sep 2008
Date of revision:
Handle: RePEc:imf:imfwpa:08/218

Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Email:
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC

Order Information:
Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords: Human capital ; Public finance ; Private sector ; Capital ; Labor productivity ; Economic growth ; Economic models ; Economic policy ; Working Paper ;

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, vol. 65(6), pages 1389-1420, November.
  2. Diego Comin & Sunil Mulani, 2005. "A Theory of Growth and Volatility at the Aggregate and Firm Level," NBER Working Papers 11503, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Crowder, William J & Himarios, Daniel, 1997. "Balanced Growth and Public Capital: An Empirical Analysis," Applied Economics, Taylor and Francis Journals, vol. 29(8), pages 1045-53, August. [Downloadable!] (restricted)
  4. Samaniego, Roberto M., 2007. "R D And Growth: The Missing Link?," Macroeconomic Dynamics, Cambridge University Press, vol. 11(05), pages 691-714, November. [Downloadable!]
  5. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Blackwell Publishing, vol. 8(s1), pages 6-52, 04. [Downloadable!] (restricted)
    Other versions:
  6. Miguel ST. Aubyn & Álvaro Pina, 2004. "Comparing Macroeconomic Returns on human and Public Capital: An Empirical Analysis of the Portuguese Case (1960-2001)," Working Papers 2004/07, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
    Other versions:
  7. Adams, Charles & Coe, David T., 1989. "A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States," MPRA Paper 8622, University Library of Munich, Germany. [Downloadable!]
  8. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March. [Downloadable!] (restricted)
    Other versions:
  9. Pereira, Alfredo M. & de Frutos, Rafael Flores, 1999. "Public Capital Accumulation and Private Sector Performance," Journal of Urban Economics, Elsevier, vol. 46(2), pages 300-322, September. [Downloadable!] (restricted)
  10. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November. [Downloadable!] (restricted)
    Other versions:
  11. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
    Other versions:
  12. Sturm, Jan Egbert & de Haan, Jakob, 1995. "Is public expenditure really productive?: New evidence for the USA and The Netherlands," Economic Modelling, Elsevier, vol. 12(1), pages 60-72, January. [Downloadable!] (restricted)
    Other versions:
  13. Christophe Kamps, 2004. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," Kiel Working Papers 1224, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  14. Douglas Holtz-Eakin, 1992. "Public-Sector Capital and the Productivity Puzzle," NBER Working Papers 4122, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Everaert, Gerdie & Heylen, Freddy, 2001. "Public capital and productivity growth: evidence for Belgium, 1953-1996," Economic Modelling, Elsevier, vol. 18(1), pages 97-116, January. [Downloadable!] (restricted)
  16. Cummins, Jason G & Violante, Giovanni L, 2002. "Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences," CEPR Discussion Papers 3584, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  17. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-70, November. [Downloadable!] (restricted)
    Other versions:
  18. de la Fuente, Angel & Doménech, Rafael, 2002. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make? An Update and Further Results," CEPR Discussion Papers 3587, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  19. Martin Neil Baily, 1981. "Productivity and the Services of Capital and Labor," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1981-1), pages 1-66. [Downloadable!]
  20. Inder, Brett, 1993. "Estimating long-run relationships in economics : A comparison of different approaches," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 53-68. [Downloadable!] (restricted)
  21. Arora, Ashish & Gambardella, Alfonso, 1994. "The changing technology of technological change: general and abstract knowledge and the division of innovative labour," Research Policy, Elsevier, vol. 23(5), pages 523-532, September. [Downloadable!] (restricted)
  22. Søren Johansen & Rocco Mosconi & Bent Nielsen, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 216-249. [Downloadable!]
    Other versions:
  23. Barry P. Bosworth & Susan M. Collins and Georgetown University, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2003-2), pages 113-206. [Downloadable!]
  24. Robert Ford & Pierre Poret, 1991. "Infrastructure and Private-Sector Productivity," OECD Economics Department Working Papers 91, OECD, Economics Department. [Downloadable!]
  25. Evans, Paul & Karras, Georgios, 1994. "Is government capital productive? Evidence from a panel of seven countries," Journal of Macroeconomics, Elsevier, vol. 16(2), pages 271-279. [Downloadable!] (restricted)
  26. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September. [Downloadable!] (restricted)
  27. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15. [Downloadable!]
  28. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May. [Downloadable!] (restricted)
  29. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
    Other versions:
  30. Urbain, Jean-Pierre, 1992. "On Weak Exogeneity in Error Correction Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 187-207, May.
    Other versions:
  31. Alicia H. Munnell, 1990. "Why has productivity growth declined? Productivity and public investment," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-22.
  32. Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-92, December. [Downloadable!] (restricted)
  33. Adam B. Jaffe & Manuel Trajtenberg & Michael S. Fogarty, 2000. "Knowledge Spillovers and Patent Citations: Evidence from a Survey of Inventors," American Economic Review, American Economic Association, vol. 90(2), pages 215-218, May. [Downloadable!] (restricted)
  34. Lynde, Catherine & Richmond, J, 1993. "Public Capital and Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 401-14, May. [Downloadable!] (restricted)
  35. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  36. Bajo-Rubio, Oscar & Sosvilla-Rivero, Simon, 1993. "Does public capital affect private sector performance? : An analysis of the Spanish case, 1964-1988," Economic Modelling, Elsevier, vol. 10(3), pages 179-185, July. [Downloadable!] (restricted)
  37. Raymond Batina, 1998. "On the Long Run Effects of Public Capital and Disaggregated Public Capital on Aggregate Output," International Tax and Public Finance, Springer, vol. 5(3), pages 263-281, July. [Downloadable!] (restricted)
  38. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? The RePEc project started in 1997. Its precursor, NetEc, dates back to 1993.

This page was last updated on 2009-11-20.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.