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The sources of total factor productivity growth: Evidence from Canadian data

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  • Kenneth Carlaw
  • Stephen Kosempel

Abstract

A dynamic general equilibrium model is constructed and used to identify sources of total factor productivity growth in Canada and to quantify their importance. The model also provides procedures for constructing measures of technological progress. We find that periods of low productivity growth correspond to periods of high growth in investment-specific technology (IST) or high rates of technology embodiment. For example, the growth rate of IST was relatively high between 1974 and 1996. The higher growth rate of IST during this period should have increased the rate of productivity growth by an estimated 0.29 percentage points, ceteris paribus. Yet, productivity growth slowed. Why?

Suggested Citation

  • Kenneth Carlaw & Stephen Kosempel, 2004. "The sources of total factor productivity growth: Evidence from Canadian data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(4), pages 299-309.
  • Handle: RePEc:taf:ecinnt:v:13:y:2004:i:4:p:299-309
    DOI: 10.1080/10438590410001629007
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    References listed on IDEAS

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    1. Stephen Kosempel & Kenneth Carlaw, 2003. "Accounting For Canada¡¯S Economic Growth," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 28(2), pages 83-101, December.
    2. Jorgenson, Dale W., 1966. "The Embodiment Hypothesis," Scholarly Articles 3403063, Harvard University Department of Economics.
    3. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    4. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    5. Kenneth I. Carlaw & Richard G. Lipsey, 2003. "Productivity, Technology and Economic Growth: What is the Relationship?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 457-495, July.
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    Citations

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    Cited by:

    1. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2008. "The productivity paradox and the new economy: The Spanish case," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1569-1586, December.
    2. Les T. Oxley & Kenneth I. Carlaw, 2004. "ICT Diffusion and Economic Growth in New Zealand," Econometric Society 2004 Australasian Meetings 167, Econometric Society.
    3. Mario Pianta & Andrea Vaona, 2007. "Innovation and Productivity in European Industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(7), pages 485-499.
    4. Cristiano Antonelli & Francesco Quatraro, 2010. "The effects of biased technological change on total factor productivity: empirical evidence from a sample of OECD countries," The Journal of Technology Transfer, Springer, vol. 35(4), pages 361-383, August.
    5. José Luis Torres Chacon, 2015. "Introduction to Dynamic Macroeconomic General Equilibrium Models," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 2, number 54, Junio.
    6. Francesco Crespi & Mario Pianta, 2008. "Demand and innovation in productivity growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(6), pages 655-672.
    7. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2010. "ICT-specific technological change and productivity growth in the US: 1980-2004," Information Economics and Policy, Elsevier, vol. 22(2), pages 121-129, May.
    8. Carlaw, Kenneth I. & Oxley, Les, 2008. "Resolving the productivity paradox," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 78(2), pages 313-318.
    9. Diego Martínez & Jesús Rodríguez, 2009. "New technologies and regional growth: the case of Andalucía," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(4), pages 963-987, December.
    10. José Luis Torres Chacon, 2015. "Introduction to Dynamic Macroeconomic General Equilibrium Models [Second Edition, Paperback]," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 2, number 44.

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