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Getting Income Shares Right

Author

Listed:
  • Aamer S. Abu-Qarn

    (Ben-Gurion University, Beer-Sheva, Israel, aamer@bgu.ac.il)

  • Suleiman Abu-Bader

    (Ben-Gurion University, Beer-Sheva, Israel)

Abstract

This article presents estimates of the shares of inputs in income for countries of the Organization for Economic Cooperation and Development, utilizing advanced panel data techniques. Its findings are as follows: A share of physical capital of over 0.50, as opposed to the conventional one third, is robust to several specifications of the production function; the organization's growth was driven mainly by accumulation of resources and not technological gains; and following the first oil shock, the share of physical capital dropped, whereas the share of human capital rose. Consequently, using the conventional shares may have led to overstating the severity of the post-1973 productivity slowdown.

Suggested Citation

  • Aamer S. Abu-Qarn & Suleiman Abu-Bader, 2009. "Getting Income Shares Right," Economic Development Quarterly, , vol. 23(3), pages 254-266, August.
    • Handle: RePEc:sae:ecdequ:v:23:y:2009:i:3:p:254-266
    DOI: 10.1177/0891242408331025
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    References listed on IDEAS

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    2. Monica Pop Silaghi & Diana Alexa, 2015. "Sources of Growth: Evidence from Ten Central and Eastern European Countries during 1993-2008," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(5), pages 643-661, December.
    3. Luciano Fanti & Luca Gori, 2010. "Economic Growth and Welfare in a Neoclassical Overlapping Generations Growth Model with Minimum Wages and Consumption Taxes," LABOUR, CEIS, vol. 24(3), pages 238-262, September.

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