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Relating the Knowledge Production Function to Total Factor Productivity: An Endogenous Growth Puzzle

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  • Mr. Frederick L Joutz
  • Mr. Yasser Abdih

Abstract

The knowledge production function is central to R&D-based growth models. This paper empirically investigates the knowledge production function and intertemporal spillover effects using cointegration techniques. Time-series evidence suggests there are two long-run cointegrating relationships. The first captures a long-run knowledge production function; the second captures a long-run positive relationship between TFP and the knowledge stock. The results indicate the presence of strong intertemporal knowledge spillovers and that the long-run impact of the knowledge stock on TFP is small. This evidence is interpreted in light of existing theoretical and empirical evidence on endogenous growth.

Suggested Citation

  • Mr. Frederick L Joutz & Mr. Yasser Abdih, 2005. "Relating the Knowledge Production Function to Total Factor Productivity: An Endogenous Growth Puzzle," IMF Working Papers 2005/074, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2005/074
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    Keywords

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    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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