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Productivity from the Bottom Up: Firms and Resource Allocation in Latin America

In: The Age of Productivity

Author

Listed:
  • Carmen Pagés

    (Inter-American Development Bank)

Abstract

Consider a leading sports team. To succeed, it must be staffed with good players and they must be placed in the right positions. Just like a successful sports team, the productivity of an economy depends on two basic factors: the productivity of its firms (the players) and the allocation of its available resources (labor and capital) among its firms (the positions). And just as a team full of stars can play poorly if players are assigned to the wrong positions, aggregate productivity depends on much more than the productivity of individual firms. Of course, it would be difficult to put together a successful team-or economy-with weak or inexperienced players.

Suggested Citation

  • Carmen Pagés, 2010. "Productivity from the Bottom Up: Firms and Resource Allocation in Latin America," Palgrave Macmillan Books, in: Carmen Pagés (ed.), The Age of Productivity, chapter 4, pages 69-96, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-0-230-10761-8_4
    DOI: 10.1057/9780230107618_4
    as

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