Sources of Economic Growth: An Extensive Growth Accounting Exercise

IMF Working Papers, June 1, 1999

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Sources of Economic Growth: An Extensive Growth Accounting Exercise

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Bibliographic details

• Authors: Abdelhak S Senhadji
• Published: June 1, 1999
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451849974.001

Summary

• A growth accounting exercise is conducted for 88 countries for 1960-94 to examine the source of cross-country differences in total factor productivity (TFP) levels.
• Two differences distinguish this analysis from that of the related literature:
  • The critical technology parameter—the share of physical capital in real output—is econometrically estimated and the usual assumption of identical technology across regions is relaxed.
  • While the few studies on the determinants of cross-country differences in TFP have focused on growth rates of real output, this analysis is on levels. Recent theoretical as well as empirical arguments point to the level of TFP as the more relevant variable to explain.

Methodology

• Growth accounting exercise applied to a sample of 88 countries covering 1960-94.
• Econometric estimation of the technology parameter: the share of physical capital in real output.
• Release from the common-assumption of identical technology across regions to allow regional heterogeneity in production technology.
• Focus on TFP levels rather than growth rates of real output, motivated by recent theoretical and empirical arguments favoring levels as the relevant explanatory variable.

Key Findings and Focus Areas

• The exercise is designed to examine sources of cross-country differences in TFP levels.
• Emphasis on levels of TFP as opposed to growth rates.
• Use of the Cobb-Douglas production function framework is implied by keywords and subject terms.
• Subject areas covered: Economic growth, Growth accounting, Human capital, Labor, Production, Production growth, Total factor productivity.
• Keywords indicate geographic and thematic breadth: Africa, East Africa, East Asia, Middle East, South Asia; topics include Human capital, TFP performance, TFP ranking, TFP series, time series, correlation coefficient, dummy variable, increase TFP, and WP.

Content in this bundle

• Sources of Economic Growth: An Extensive Growth Accounting Exercise - WP/99/77
  • Sources of Economic Growth: An Extensive Growth Accounting Exercise - WP/99/77 (Markdown version)
  • Sources of Economic Growth: An Extensive Growth Accounting Exercise - WP/99/77 (PDF)