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Growth Accounting

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  • Charles R. Hulten

Abstract

Incomes per capita have grown dramatically over the past two centuries, but the increase has been unevenly spread across time and across the world. Growth accounting is the principal quantitative tool for understanding this phenomenon, and for assessing the prospects for further increases in living standards. This paper sets out the general growth accounting model, with its methods and assumptions, and traces its evolution from a simple index-number technique that decomposes economic growth into capital-deepening and productivity components, to a more complex account of the growth process. In the more complex account, capital and productivity interact, both are endogenous, and quality change in inputs and output matters. New developments in micro-level productivity analysis are also reviewed, and the long-standing question of net versus gross output as the appropriate indicator of economic growth is addressed.

Suggested Citation

  • Charles R. Hulten, 2009. "Growth Accounting," NBER Working Papers 15341, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15341
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    Citations

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    Cited by:

    1. André Lorentz & Tommaso Ciarli & Maria Savona & Marco Valente, 2016. "The effect of demand-driven structural transformations on growth and technological change," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 219-246, March.
    2. Hernando Zuleta, 2015. "Getting Growth Accounting Right," DOCUMENTOS CEDE 013814, UNIVERSIDAD DE LOS ANDES-CEDE.
    3. Marijn Verschelde & Michel Dumont & Bruno Merlevede & Glenn Rayp, 2014. "A constrained nonparametric regression analysis of factor-biased technical change and TFP growth at the firm level," Working Paper Research 266, National Bank of Belgium.
    4. Feng, Guohua & Serletis, Apostolos, 2010. "A primal Divisia technical change index based on the output distance function," Journal of Econometrics, Elsevier, vol. 159(2), pages 320-330, December.
    5. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    6. Yi-Chen Lin & Tai-Hsin Huang, 2012. "Creative destruction over the business cycle: a stochastic frontier analysis," Journal of Productivity Analysis, Springer, vol. 38(3), pages 285-302, December.
    7. Michel Dumont, 2011. "Working Paper 11-11 - A decomposition of industry-level productivity growth in Belgium using firm-level data," Working Papers 1111, Federal Planning Bureau, Belgium.
    8. Yin-Wong Cheung & Michael P. Dooley & Vladyslav Sushko, 2012. "Investment and Growth in Rich and Poor Countries," NBER Working Papers 17788, National Bureau of Economic Research, Inc.
    9. Tommaso Ciarli & Andre' Lorentz & Maria Savona & Marco Valente, 2012. "The role of technology, organisation, and demand in growth and income distribution," LEM Papers Series 2012/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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