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Development Accounting and the Rise of TFP

Author/Editor: Arezki, Rabah | Cherif, Reda
Authorized for Distribution: April 1, 2010
Electronic Access: Free Full Text (PDF file size is 1,376KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: The paper presents evidence that the contribution of differences in total factor productivity (TFP) to income differences across countries steadily increased between 1970 and 2000. We verify that our finding is neither imputable to measurement errors in input factors nor dependent on the assumption of factor neutral differences in technology. We conclude that theories explaining cross-country income differences based on institutions or on forces that are constant over time, such as geography or legal origin, should be reconsidered in the light of their consistency with the rise of the explanatory power of TFP.
 
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Series: Working Paper No. 10/101
Subject(s): Accounting | Cross country analysis | Economic models | Income distribution | Productivity | Time series
Author's keyword(s): Development Accounting | Income Differences ; TFP
 
English  
    Published:   April 1, 2010        
            Format:   Paper
    Stock No:   WPIEA2010101   Pages:   32
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
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