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Misallocation and Productivity

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  • Diego Restuccia
  • Richard Rogerson

Abstract

A large portion of differences in output per capita across countries is explained by differences in total factor productivity (TFP). In this article, we summarize a recent literature - and the articles in this special issue on misallocation and productivity - that focus on the reallocation of factors across heterogeneous production units as an important source of measured TFP differences across countries.

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  • Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-468
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    Keywords

    misallocation; productivity; heterogeneous establishments; distortions.;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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