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Second thoughts on development accounting

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  • Gundlach, Erich
  • Rudman, Desmond
  • Wößmann, Ludger

Abstract

We estimate the relative roles of factor inputs and productivity in explaining the level of economic development, which is measured as output per worker. For a large sample of countries, we show that alternative identifying productivity assumptions and alternative measures of human capital have a large impact on the relative weights of factor inputs and productivity in a decomposition of output per worker. For a sample of OECD countries, we find that productivity has almost no role in explaining cross-country differences in output per worker. This result supports the reasoning of a traditional neoclassical growth model.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 895.

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Date of creation: 1998
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Handle: RePEc:kie:kieliw:895

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  1. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-98, June.
  2. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  3. Eric A. Hanushek & Dongwook Kim, 1995. "Schooling, Labor Force Quality, and Economic Growth," NBER Working Papers 5399, National Bureau of Economic Research, Inc.
  4. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
  5. Edward C. Prescott, 1997. "Needed: a theory of total factor productivity," Staff Report 242, Federal Reserve Bank of Minneapolis.
  6. Barro, Robert J, 1999. " Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-37, June.
  7. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-68, June.
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