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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.

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File URL: http://www.sunysb.edu/economics/research/papers/2009/nuriaquella09.pdf
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Bibliographic Info

Paper provided by Stony Brook University, Department of Economics in its series Department of Economics Working Papers with number 09-03.

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Date of creation: Oct 2009
Date of revision:
Handle: RePEc:nys:sunysb:09-03

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Keywords: Knowledge spillovers; productivity; human capital; learning; wages.;

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References

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  1. Young, Alwyn, 1993. "Invention and Bounded Learning by Doing," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 443-72, June.
  2. Peter Thompson, 2004. "Patent Citations and the Geography of Knowledge Spillovers: Evidence from Inventor- and Examiner-Added Citations," Working Papers 0405, Florida International University, Department of Economics, revised Jun 2005.
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  18. Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
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Cited by:
  1. F. Mureddu & F. Cerina, 2009. "Is Agglomeration really good for Growth? Global Efficiency, Interregional Equity and Uneven Growth," Working Paper CRENoS 200913, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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