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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
15740.
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 listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Bernard, Andrew B & Jones, Charles I, 1996.
"Technology and Convergence,"
Economic Journal,
Royal Economic Society, vol. 106(437), pages 1037-44, July.
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