Intangible Capital and International Income Differences
AbstractI add intangible capital to a variant of the neoclassical growth model and study the implications for cross-country income differences. I calibrate the parameters associated with intangible capital by using new estimates of investment in intangibles by Corrado et al. (2006). When intangible capital is added to the model, the TFP elasticity of output increases from 2.14 to 2.64. This finding implies that the addition of intangible capital increases the ability of the neoclassical growth model to explain international income differences by more than a factor of two.
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Bibliographic InfoPaper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0801.
Length: 23 pages
Date of creation: Jun 2008
Date of revision:
International Income Differences; Intangible Capital;
Other versions of this item:
- Hashmi, Aamir Rafique, 2013. "Intangible Capital And International Income Differences," Macroeconomic Dynamics, Cambridge University Press, vol. 17(03), pages 621-645, April.
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-29 (All new papers)
- NEP-DEV-2008-09-29 (Development)
- NEP-DGE-2008-09-29 (Dynamic General Equilibrium)
- NEP-SOC-2008-09-29 (Social Norms & Social Capital)
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