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Productivity differences across OECD countries, 1970–2000: the world technology frontier revisited

  • Growiec, Jakub

We re-estimate the World Technology Frontier (WTF) non-parametrically, using the Data Envelopment Analysis method, with a dataset covering both OECD country-level and US state-level data on GDP per worker and the stocks of physical capital, unskilled labor, and skilled labor. The WTF 2000 is found to be spanned by a few US states such as Colorado, Connecticut, Delaware, Nevada, Utah, and Washington, while the USA as a whole falls markedly behind these leader states. The auxilliary use of US state-level data adds extra precision to cross-country growth and levels accounting exercises. We also calculate the "appropriate technology vs. efficiency" decomposition, disentangling dynamic shifts of the WTF from movements along the WTF. Our results indicate that previous estimates of the WTF might have been downward biased and previous estimates of technical efficiency might have been upward biased.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11605.

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Date of creation: 14 Nov 2008
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Handle: RePEc:pra:mprapa:11605
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  1. Daniel J. Henderson & R. Robert Russell, 2005. "Human Capital And Convergence: A Production-Frontier Approach ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(4), pages 1167-1205, November.
  2. Caselli, Francesco, 2004. "Accounting for Cross-Country Income Differences," CEPR Discussion Papers 4703, C.E.P.R. Discussion Papers.
  3. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc.
  4. Pandey, Manish, 2008. "Human capital aggregation and relative wages across countries," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1587-1601, December.
  5. David N. Weil, 1996. "Appropriate Technology and Growth," Working Papers 96-24, Brown University, Department of Economics.
  6. Chad Turner & Robert Tamura & Sean Mulholland, 2013. "How important are human capital, physical capital and total factor productivity for determining state economic growth in the United States, 1840–2000?," Journal of Economic Growth, Springer, vol. 18(4), pages 319-371, December.
  7. repec:dgr:rugggd:200363 is not listed on IDEAS
  8. Angel de la Fuente & Rafael Donénech, 2000. "Human Capital in Growth Regressions: How much Difference Does Data Quality Make?," OECD Economics Department Working Papers 262, OECD Publishing.
  9. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
  10. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
  11. Oleg Badunenko & Daniel J. Henderson & Valentin Zelenyuk, 2007. "Technological Change and Transition: Relative Contributions to Worldwide Growth during the 1990s," Discussion Papers of DIW Berlin 740, DIW Berlin, German Institute for Economic Research.
  12. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  13. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
  14. Growiec, Jakub, 2006. "A New Class of Production Functions and an Argument Against Purely Labor-Augmenting Technical Change," MPRA Paper 7069, University Library of Munich, Germany.
  15. Charles I. Jones, 2004. "The Shape of Production Function and the Direction of Technical Change," NBER Working Papers 10457, National Bureau of Economic Research, Inc.
  16. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
  17. Jerzmanowski, Michal, 2007. "Total factor productivity differences: Appropriate technology vs. efficiency," European Economic Review, Elsevier, vol. 51(8), pages 2080-2110, November.
  18. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
  19. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
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