Growth, Productivity, and the Rate of Returnon Capital

May 1, 1992

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Format: Chicago

Bankim Chadha, and Charles Adams. Growth, Productivity, and the Rate of Returnon Capital, (USA: International Monetary Fund, 1992) accessed December 5, 2024

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

This paper examines the ability of alternative classes of growth models to explain the historical experience of the U.S. economy. The potential returns to the U.S. from raising its investment rate in terms of both the level and growth rate of future output are then quantified. The long-run growth performance of the U.S. economy is found to be broadly consistent with the predictions of the neoclassical growth model. Endogenous growth models, which suggest a larger contribution of capital to growth and long-run effects of investment on the growth rate, do not seem to be supported by the data.

Subject: Capital income, Capital productivity, Economic theory, Labor, National accounts, Neoclassical theory, Production, Production growth

Keywords: Augmented labor, Capital income, Capital productivity, Depreciation rate, Diminishing returns, Growth contribution, Income share, Investment rate, Labor input, Neoclassical theory, Production function, Production growth, WP

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/035
Stock No:

WPIEA0351992
ISBN:

9781451978407
ISSN:

1018-5941

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