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Knowledge Spillovers and TFP Growth Rates

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  • Nuria Quella

    (Dept. of Economics, Stony Brook University)

Abstract

In this paper I calibrate unobserved labor-generated knowledge spillovers within and between six large macroeconomic sectors covering the U.S. civilian economy from 1948 to 1991. Using quality-adjusted data I show that manufacturing and trade & transportation are the main source of knowledge flows to the overall economy for the entire period. However, the productivity slowdown of the early seventies coincides with trade & transportation taking over manufacturing as the main source and destination of post-73 knowledge flows. Furthermore, I compute the gap between the market and the optimal allocation of labor across sectors, and the wedge between market and optimal wages by sector. I find that, for the whole period, optimal employment in manufacturing and trade & transportation is, respectively, 20% and 27% above market. As a result optimal output in these sectors is 12% and 16% higher than the market’s, and optimal wages in manufacturing are 54% above market wages.

Suggested Citation

  • Nuria Quella, 2009. "Knowledge Spillovers and TFP Growth Rates," Department of Economics Working Papers 09-03, Stony Brook University, Department of Economics.
    • Handle: RePEc:nys:sunysb:09-03
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    File URL: http://www.stonybrook.edu/commcms/economics/research/papers/2009/nuriaquella09.pdf
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    References listed on IDEAS

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    2. Cerina, Fabio & Mureddu, Francesco, 2014. "Is agglomeration really good for growth? Global efficiency, interregional equity and uneven growth," Journal of Urban Economics, Elsevier, vol. 84(C), pages 9-22.

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    More about this item

    Keywords

    Knowledge spillovers; productivity; human capital; learning; wages.;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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