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Empty Sources of Growth Accounting, and Empirical Replacements à la Kaldor with Some Beef

Author

Listed:
  • Codrina Rada

    (New School University, New York, USA)

  • Lance Taylor

    (New School University, New York, USA)

Abstract

Standard sources of growth accounts are empty of content because they rely on neoclassical production theory. Rather, analysis can be based on productivity growth quations derived either from NIPA accounting conventions or algebraic identities. These complementary schemes impose valid restrictions on growth rates of the wage rate, profit rate, capital, labor, and their respective average productivities. A Solow-type growth model based on proper accounting can be shown to converge. Detailed results differ markedly from those of the standard model. Alternative, essentially Kaldorian supply-and demandbased alternatives to sources of growth based on a familiar output growth vs. productivity growth diagram with constant employment growth contours added in look like a useful alternative to the mainstream models

Suggested Citation

  • Codrina Rada & Lance Taylor, 2004. "Empty Sources of Growth Accounting, and Empirical Replacements à la Kaldor with Some Beef," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 5(3), pages 45-74.
  • Handle: RePEc:anp:econom:v:5:y:2004:i:3:p:45-74
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    References listed on IDEAS

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    1. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    2. Taylor, Mark P & Peel, David A & Sarno, Lucio, 2001. "Nonlinear Mean-Reversion in Real Exchange Rates: Toward a Solution to the Purchasing Power Parity Puzzles," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1015-1042, November.
    3. Taylor, Lance, 1994. "Gap models," Journal of Development Economics, Elsevier, vol. 45(1), pages 17-34, October.
    4. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2-3), pages 208-262, May.
    5. Shaikh, Anwar, 1974. "Laws of Production and Laws of Algebra: The Humbug Production Function," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 115-120, February.
    6. Mark P. Taylor, 2003. "Purchasing Power Parity," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 436-452, August.
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    Citations

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    Cited by:

    1. Francis Cripps & Alex Izurieta & Ajit Singh, 2011. "Forum 2011," Development and Change, International Institute of Social Studies, vol. 42(1), pages 228-261, January.
    2. Tapia, Jose, 2015. "Profits encourage investment, investment dampens profits, government spending does not prime the pump — A DAG investigation of business-cycle dynamics," MPRA Paper 64985, University Library of Munich, Germany, revised Jun 2015.
    3. Cripps, F. & Izurieta, A. & Singh, A., 2011. "Global Imbalances, Under-Consumption and Over-Borrowing: The State of the World Economy and Future Policies," Working Papers wp419, Centre for Business Research, University of Cambridge.
    4. Ocampo, José Antonio & Parra, María Angela, 2007. "The dual divergence: growth successes and collapses in the developing world since 1980," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1938, December.
    5. Cripps, Francis & Izurieta, Alex & Singh, Ajit, 2011. "Global imbalances, under-consumption and overborrowing: the state of the world economy & future policies," MPRA Paper 39049, University Library of Munich, Germany.
    6. Lance Taylor, 2008. "A foxy hedgehog: Wynne Godley and macroeconomic modelling," Cambridge Journal of Economics, Oxford University Press, vol. 32(4), pages 639-663, July.
    7. Roberto Frenkel & Lance Taylor, 2006. "Real Exchange Rate, Monetary Policy and Employment," Working Papers 19, United Nations, Department of Economics and Social Affairs.

    More about this item

    Keywords

    Sources of Growth Accounting; Total Factor Productivity Growth; Kaldorian Growth Model;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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