The World Distribution of Productivity: Country TFP Choice in a Nelson-Phelps Economy
AbstractThis paper builds a theory of the distribution of TFP across countries. The theory is based on the hypothesis that TFP improvements in a given country follow a Nelson-Phelps specification: they derive from past investments in the country itself and, through a spillover term, from past investments in other countries. Within a stochastic dynamic general equilibrium model of the world, each country invests in TFP and internalizes the dynamic effects of its investments, while ignoring any effects on others. Small symmetric idiosyncratic shocks can lead to large long-run differences in TFP levels and the world TFP distribution may become twin-peaked.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16375.
Date of creation: Sep 2010
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Other versions of this item:
- Färnstrand Damsgaard, Erika & Krusell, Per, 2010. "The World Distribution of Productivity: Country TFP Choice in a Nelson-Phelps Economy," CEPR Discussion Papers 8022, C.E.P.R. Discussion Papers.
- Per Krusell & Erika Färnstrand Damsgaard, 2011. "The World Distribution of Productivity: Country TFP Choice in a Nelson-Phelps Economy," 2011 Meeting Papers 379, Society for Economic Dynamics.
- Färnstrand Damsgaard, Erika & Krusell, Per, 2010. "The World Distribution of Productivity: Country TFP Choice in a Nelson-Phelps Economy," Working Paper Series 850, Research Institute of Industrial Economics.
- Erika Farnstrand Damsgaard, 2008. "The World Distribution of Productivity: Country TFP Choice in a Nelson-Phelps Economy," 2008 Meeting Papers 176, Society for Economic Dynamics.
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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