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Growth accounting in items of turbulence and death: efficiency, technology, capital accumulation and human capital 1929-1950

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  • Kerstin Enflo
  • Jörg Baten

Abstract

We employ a non-parametrical approach to growth accounting (Data Envelopment Analysis, DEA) to disentangle the proximate sources of labour productivity growth in 41 nations between 1929 and 1950 by decomposing productivity growth into four components: technological change; efficiency catch-up (movements towards the production frontier), capital accumulation and human capital accumulation. We show that efficiency catch-up generally explains productivity growth, whereas technological change and factor accumulation were limited and distorted by the effects of war. War clearly hampered efficiency. Moreover, an unbalanced ratio of human capital to physical capital (a gap to the technological leader) was crucial for efficiency catching-up.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1024.

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Date of creation: Mar 2007
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Handle: RePEc:upf:upfgen:1024

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Web page: http://www.econ.upf.edu/

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Keywords: DEA; growth accounting; productivity; interwar period;

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  1. Duffy, John & Papageorgiou, Chris, 2000. " A Cross-Country Empirical Investigation of the Aggregate Production Function Specification," Journal of Economic Growth, Springer, vol. 5(1), pages 87-120, March.
  2. Durlauf,S.N. & Johnson,P.A. & Temple,J.R.W., 2004. "Growth econometrics," Working papers 18, Wisconsin Madison - Social Systems.
    • Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
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