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Abstract

This paper evaluates the relative contribution of factor accumulation and technology in explaining output per worker differences across Italian regions in the period 2000-2004. The contributions of physical and human capital are separately estimated through the variance decomposition of output per worker. Whereas from a basic analysis of development accounting with crude data TFP emerges as a fundamental determinant of output per worker, when more accurate data are used in the estimations of human and physical capital, results change radically, showing a higher importance of factor accumulation with respect to previous standard estimations. Several measures of quality of human and physical capital are introduced: a) individuals’ cognitive skills as measured in international test scores; b) region specific rates of return on human capital; c) public investments and public-subsidized investments are weighted differently from private investment in the determination of physical capital stock. We show that better measurement of factor inputs allows a reduction in the solowian “measure of our ignorance”.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15740.

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Date of creation: 2007
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Handle: RePEc:pra:mprapa:15740

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Related research

Keywords: Growth; Technological Gaps; Human Capital; Physical Capital; Development Accounting; Quality of inputs;

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Find related papers by JEL classification:

• O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
• E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

References

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Cited by:

1. Aiello, Francesco & Scoppa, Vincenzo, 2008. "Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data," MPRA Paper 17343, University Library of Munich, Germany.
2. Giuseppe Albanese & Giuseppe Albanese, 2010. "On the Production Function for Italy," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 118(4), pages 401-416.
3. Francesco AIELLO & Valeria PUPO, 2009. "L'impatto della politica regionale dell'Unione Europea. Uno studio sulle regioni italiane," Rivista Italiana degli Economisti, SIE - Societa' Italiana degli Economisti (I), vol. 14(3), pages 421-454, December.
   
   • Pupo Valeria & Aiello Francesco, 2009. "L'impatto della politica regionale dell'Unione Europea. Uno studio sulle regioni italiane," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 421-454.
4. Vincenzo Scoppa, 2009. "Technological Catch-Up Or Neoclassical Convergence? Identifying The Channels Of Convergence For Italian Regions," Working Papers 200904, Università della Calabria, Dipartimento di Scienze Economiche, Statistiche e Finanziarie (Ex Dipartimento di Economia e Statistica).
   
   • Scoppa, Vincenzo, 2009. "Technological Catch-up or Neoclassical Convergence? Identifying the Channels of Convergence for Italian Regions," MPRA Paper 13051, University Library of Munich, Germany.
5. Aiello, Francesco & Pupo, Valeria, 2009. "Capacità di gestione, efficienza istituzionale e impatto dei Fondi Strutturali in Italia
   [The Impact of Structural Funds in Italy]," MPRA Paper 14429, University Library of Munich, Germany.
6. Francesco Aiello & Valeria Pupo, 2009. "L’Impatto Dei Fondi Strutturali In Italia," Working Papers 200901, Università della Calabria, Dipartimento di Scienze Economiche, Statistiche e Finanziarie (Ex Dipartimento di Economia e Statistica).

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