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Explaining the gaps in labour productivity in some developed countries

  • Weshah Razzak

    (Department of Labour - New Zealand)

Modern economic theories explain differences in productivity and economic growth by differences in political and economic institutions, and differences in culture, geographical location, policies, and laws. Another new strand of the literature explains productivity and economic growth differentials by gaps in general purpose technology and information and communication technology, while another literature cites real exchange rate depreciations as the main explanatory variable. These gaps might explain differences in economic performances between developed and developing countries, but they are too small to explain differences between developed industrial economies such as New Zealand and Australia or Canada and the United States. In this paper, more than eighty percent of labour productivity gaps between New Zealand and Australia and Canada and the United States are explained by endogenous technology shocks (TFP) and capital intensities.

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File URL: http://repec.org/mmf2006/up.18034.1143489929.pdf
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Paper provided by Money Macro and Finance Research Group in its series Money Macro and Finance (MMF) Research Group Conference 2006 with number 30.

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Date of creation: 02 Feb 2007
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Handle: RePEc:mmf:mmfc06:30
Contact details of provider: Web page: http://www.essex.ac.uk/afm/mmf/index.html

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