Transition accounting for India in a multi-sector dynamic general equilibrium model

Using a quantitative methodology designed specifically for emerging economies, we measure the components of India’s economic growth over the period 1960–2005. Our approach accounts for time-varying parameters, transitional dynamics and non-linear trends. We find that increased productivity in the service sector, facilitated by a structural shift toward services, is the principal driver of India’s economic growth. Our measures also suggest that the allocation of inputs across sectors has not improved over this period, and in the case of labor appears to have significantly worsened. We further find that fluctuations in output around its trend are due primarily to fluctuations in sector-specific total factor productivity, with fluctuations in labor market distortions and labor taxes also playing important roles. In the period 1960–1980, productivity fluctuations in the agricultural sector are the dominant source of cycles. Since then, productivity fluctuations in the manufacturing and service sectors have been more important.     

Post-Soviet Society and Russia’s Macroeconomic Statistics

This article investigates the causes of the distorted macroeconomic statistics in the Russian Federation. It introduces alternative methods for the estimation of gross domestic product (GDP) growth, and the growth and amount of fixed capital stock, and estimates them by drawing on alternative data. Our estimates for the period of 1992–2015 differ substantially from those reported by the Russian Federal State Statistics Service (Rosstat). According to our estimates, GDP declined by 10.2 percent, which is in sharp contrast with the official estimate reporting growth of 13.4 percent. The same is found with regard to labor productivity, for which we find a decline of 30.1 percent instead of a growth of 9.2 percent. Accordingly, the full book value of fixed capital stock shrunk by 29.2 percent instead of the officially reported 50.9 percent growth. The drop in the residual value of fixed capital is estimated at 52.6 percent. The ratio of replacement to book value of fixed capital fluctuated between 4:1 in the middle of the period and 7:1 toward the end of the period. Additionally, we estimate the amount of investment in human and physical capital necessary for producing 3 percent annual GDP growth. Financing such investment would require a decline in personal consumption by about a factor of 2, with a greater part of it falling on the better off population strata. Finally, we make suggestions regarding income redistribution.     

Evaluating Productivity Growth Measures in the EU

In this paper we evaluate the productivity growth of the member countries in the European Union (EU) before and after the enforcement of the Maastricht convergence criteria in 1992. Total factor productivity was measured by employing the growth-accounting approach and Tornqvist indices. The evaluation of productivity growth was performed by employing the non-parametric method of Data Envelopment Analysis (DEA) in particular years and within three time periods. DEA was also used to evaluate the relative efficiency of EU members with respect to the convergence criteria with important implications for their economic integration. TFP growth was found to have contributed the most in the EU, while its share in the latest recessions was the smallest as compared to labor and capital share.     

A Bayesian stochastic frontier: an application to agricultural productivity growth in European countries

This paper measures and compares total factor productivity (TFP) growth in agriculture for the European Union (EU) countries and candidate countries (CC), in order to distinguish and investigate cross-country differences in agricultural productivity growth rates from 1993 to 2006. A stochastic production frontier model is estimated using a Bayesian approach capturing country-specific time-invariant heterogeneity and country-specific time-varying inefficiency. Agricultural productivity growth is found to be mostly driven by technological change. The TFP growth rates of the EU-12 countries and CC are about twice the EU-15 growth rate. Catch-up in productivity levels is observed between EU-15 and EU-12 as well as between EU-15 and CC. The results are compared for a situation in which country-specific time-invariant heterogeneity is not taken into account.     

The failure of effective technological transfer in Polish industry

Central planners in Poland have continuously emphasized the importance of increasing factor productivity as a major goal of Polish development policy and have included this goal as an integral part of every economic reform proposal of the last two decades. In the decade of the 1970s a new development strategy was initiated which counted heavily on the import of more technologically advanced machinery and equipment and the purchase of licenses and production processes from the West. This paper documents the tremendous increase in Western imports and the purchase of licenses which took place in the 1970s, and which would then be expected to generate an increase in joint factor productivity due to technological change. Empirical analysis, however, indicates that there was no effective transfer of the technology. Joint factor productivity for total industry calculated as a residual in estimated production functions, which include imported inputs, has a zero rate of growth from 1970 to 1978 (using quarterly data). Disaggregating and using annual data over a longer sample period yields estimates of the rate of growth of joint factor productivity which increase slightly for total industry in the 1973–1977 period. For the electrical and mechanical branch which received large numbers of license and joint production agreements the rate of growth of joint factor productivity remained unchanged. The results indicate that systemic factors such as central planning, managerial inhibitions and supply bottlenecks out-weighed any potential increase in factor productivity as a result of technology transfer.     

人力资本及其视域下的农民工分析

人力资本是指通过对人的各种投资,使自然人具备改造自然和社会的价值,并通过一定的制度安排,使这种价值实现价值增值。人力资本作为资本的一种,首先是一种商品,是价值和使用价值的统一;是生产与再生产的统一;是与一定阶段的生产力水平相适应的,是具体的历史的统一;人力资本是内在本质和外在形式的统一,是生产力与生产关系的统一,是技术与制度的统一。结合人力资本的含义和农民工的自身特点看,农民工属于人力资本的范畴。确认农民工人力资本的存在具有重要的理论价值和现实意义。     

Tripartite decomposition of labor productivity growth,FDI and human development: evidence from transition economies

This study investigates the relative contribution of technological change, technological catch-up and capital deepening as drivers of labor productivity growth in 14 transition economies during the period 2000–2012. In addition, the study extends the usual decomposition of labor productivity growth by encompassing the impact of foreign direct investment (FDI) on labor productivity growth in transition economies. To illustrate the relative contribution of FDI as a driver of labor productivity growth, we present a simple theoretical model that augments Kohli [Labour productivity vs. total factor productivity. IFC Bulletin 20 (April), Irving Fisher Committee on Central Bank Statistics, International Statistical Institute, 2005] and Grosskopf et al. (Aggregation, efficiency, and measurement, Springer, New York, pp 97–116, 2007) decomposition of the labor productivity. The insights derived in this model provide an underpinning to the empirical analysis in this study. Using Blundell–Bond dynamic panel General Method of Moments estimators, the main finding of dynamic panel data regressions shows that technological catch-up, technological change, and human development level, trade and demographic of population ageing are the main factors that affect labor productivity growth in transition countries. Furthermore, the findings of dynamic panel data regressions show insignificant positive impact of FDI on productivity growth in transition economies. One explanation is that the 14 transition economies that are included in this study do not reach a minimum human development threshold level.     

A Schumpeterian growth model: wealth and directed technological change

This paper explores the effects of the accumulation of savings on the creative reaction of firms, the search for technological congruence and the direction of technological change with a Schumpeterian model of endogenous growth. The model shows how the accumulation of wealth accounts for the reduction of the relative user cost of capital and activates, with proper levels of knowledge governance, the creative reaction of firms, search for higher levels of technological congruence and the introduction of directed technological change with higher levels of capital intensity. The dynamics of accumulation of wealth and induced technological change accounts the self-sustained increase of total factor productivity.     

Getting out what we put in: productivity of the English National Health Service

Many countries are incorporating direct measures of non-market outputs in the national accounts. For any particular output to be included there has to be data about it for two adjacent periods. This is problematic because the classification of non-market outputs is often subject to wholesale revision. We outline the challenges associated with classification changes and propose a solution. To illustrate we construct output and input indices and estimate productivity growth of the English National Health Service (NHS) for the period 2003-2004 to 2007-2008. Our index of output growth incorporates all care provided to NHS patients and captures improvements in survival rates, waiting times and disease management. We find that more patients are being treated and the quality of the care they receive has been improving. We implement our approach to dealing with changes as to how health services are defined and show what effect this has on estimates of output growth. Our index of input growth captures all labour, intermediate and capital inputs into health service production and we improve on how capital has been measured in the past. Inputs have increased over time but there has also been a slowdown since 2005-2006, primarily the result of a levelling off in staff recruitment and less reliance on the use of agency staff. Productivity is assessed by comparing output growth with growth in inputs, the net effect being constant productivity growth between 2003-2004 and 2007-2008.     

社会资本、工业集聚与经济增长——基于中国经验的实证研究

社会资本对经济增长的重要作用,已越来越受到人们的广泛关注。笔者在对社会资本、工业集聚与经济增长相互关系进行理论分析的基础上,采用中国2000年的截面数据,实证检验各地区信任指数对地区工业集聚水平的影响。结果发现,我国各地区的信任指数对地区工业集聚具有非常显著的促进作用。在我国,社会资本通过加速工业的集聚的方式,进而促进了经济的增长。这也进一步表明,我国地区间在社会资本水平上的差异是造成我国地区经济差异的一个十分重要的原因。     

Sequence of techniques

This paper analyzes the sequence of techniques in an explicitly dynamic version of the Dobb-Sen choice of techniques model. It is proven that when the modern (capital intensive) technique dominates in an optimal full employment steady state, traditional capital accumulation is characteristic of an optimal path in the labor surplus phase when: (1) traditional capital has the higher maximal growth rate and (2) the initial capital stock is ‘sufficiently poor’. The switch date from traditional to modern capital accumulation is shown to be a function of the maximal growth rate and steady shadow price of labor for each technique and the optimal phasing out of traditional capital is characterized. These results are placed in the context of the choice of techniques controversy between Dobb, Sen and Kalecki and its relevance to early Soviet economic development.     

The Role of Symmetry between the Revenue and the Expenditure Side of the Government Budget in the Debate about the Potential Negative Effects of Tax Competition

The effects of capital tax competition are reconsidered in this paper incorporating the argument that the expenditure structure of public budget should reflect its revenue structure. The paper offers a small open economy model where capital and labour tax revenues are used exclusively on the provision of public inputs. It is shown that if the revenue side of the government budget exactly matches the expenditure side that is if industrial public goods are financed by both private production factors with the weights reflecting the contributions of public inputs to the private factor productivity then public inputs are provided optimally even in the presence of tax competition.     

The size of the SOE sector and macroeconomic performance: an empirical study based on Chinese provincial data

Using a neoclassical growth model augmented with human capital, we investigate the impact of the presence of state owned enterprises (SOEs) on macroeconomic performance in China, using provincial data from 1990 to 2004. We estimate a macroeconomic model with panel methods to explain changes in labor productivity resulting from standard influences as well as presence of the SOE sector measured in five different ways. While controlling for growth in the labor force and physical capital, government size, exposure to trade and change in economic structure, we conclude that the relative share of the SOE sector has no significant influence on macroeconomic performance in China during our sample period.     

University R&D and Firm Productivity: Evidence from Italy

Ed Mansfield wrote several papers on the private returns to basic research (e.g. Mansfield, 1980) and the influence of academic research on industrial innovation (e.g. Mansfield, 1991). We extend this line of research by assessing the impact of university research on total factor productivity growth of Italian manufacturing firms. The econometric analysis is based on reduced-form estimation of the R&D capital stock model, including controls for two potential sources of sample selection bias, as proposed by Crepon et?al (1998) and Piga and Vivarelli (2004). Our results suggest that while there are positive returns to collaborative research with other firms, collaborative research with universities does not appear to directly stimulate productivity. We interpret this result as consistent with recent evidence (e.g. Hall et?al 2001, 2003) suggesting that firms engage in collaborative research with universities when appropriability conditions are weak.     

Assessing the Effect of Incentive Regulation on Productive Efficiency in Telecommunications in the United States

The use of incentive regulation in telecommunications in the United States requires accurate measurement of the change in productivity. An approach to measuring productivity change, the Malmquist index approach, is introduced that not only provides a measure of that change but also allows for a decomposition into two mutually exclusive and exhaustive components—changes in technical efficiency over time and shifts in technology over time. Using annual data on four output measures and six input measures for the period 1988 to 1999 for nineteen local exchange carriers, the results indicate that productivity increased by about 5.5 percent per year. This growth is due primarily to innovation rather than improvements in efficiency. Of the nineteen LECs in the sample, eleven were operating efficiently throughout the entire 1988–1999 period. Of the remaining eight, four showed a slight improvement in efficiency while the efficiency of four declined. In the aggregate, however, there was virtually no change in efficiency. Finally, a comparison is made between two methods of estimating the change in productivity. The conventional growth accounting approach yields a lower estimate of the rate of change in productivity than the Malmquist index approach yield. The difference between these estimates is interpreted as the lower bound of the bias associated with the conventional growth accounting approach to measuring the growth in productivity.     

Does higher level of education of the labor force cause growth? Evidence from Bulgaria

This study tries to give new evidence on the relationship between human capital and output per capita in the former centrally-planned economies. Educational attainment of the labor force is used as a proxy for the human capital stock in Bulgaria. The empirical models are based on the extended Cobb–Douglas production function with labor, human capital as well as physical capital. In addition, the reduced form specifications include export and foreign direct investments. The econometric outcome suggests that an increase of the share of people with upper secondary education in the labor force is not related to the rate of long-run growth. Moreover, it is inversely related to the shortrun changes in real output. On the contrary, a positive impact is derived for tertiary education. In general, the study does not fully support the hypothesis that the higher average educational level of the population fosters growth. Export, physical capital and foreign direct investments turn out to be the driving forces of Bulgaria’s growth. A partial correlation analysis implies that the quality of human capital measured by foreign language proficiency could explain the insignificant effect of secondary education.     

The role of R&D and input trade in productivity growth: innovation and technology spillovers

Productivity improvements generally are driven by technology innovation and its spillovers. This study explores the role of R&D investment and intermediate input trade in productivity growth using country-industry-level data for 25 advanced and emerging economies. This paper confirms that R&D investment and intermediate input import/export (both intra- and inter-industry) with technologically advanced economies play important roles in productivity growth in non-frontier countries. We further find that the productivity gains of technology spillovers via input trade channels are likely larger for countries/industries where technology converges to the frontier. These findings imply that the recent slowdown in R&D investment and intermediate input trade in some advanced economies may contribute to declining productivity growth. The potential productivity improvements from R&D investment and free trade as well as the importance of domestic capacity in facilitating technology spillovers should be recognized.

     

The cost of regulation in a decentralized context: the case of the Spanish regions

The impact of regulation on productivity is an issue that has attracted increasing interest in recent decades, as some scholars have argued that the proliferation of red tape may be the cause of slower growth rates in some western economies. Regulation (and other public instruments) has significant effects that may be either benign or harmful. Justified and well designed regulation protects consumers from potentially unsafe products, limits pollution, enhances workplace safety and contributes to public health and safety, as well as a more productive and fair society. However, an overabundance of rules or badly designed regulation can cause confusion and delay, impose unreasonable compliance costs in terms of capital investment, labour and official paperwork, retard innovation, lower productivity and, accidentally, distort incentives for private initiative. The objective of this paper is to examine the possible impact of regulatory activity in the Spanish regions over the past decade (1989–2001) on growth and productivity.     

Growth,debt and public infrastructure

This paper presents a closed economy model of endogenous growth driven by capital externalities arising from both private capital and public infrastructure. The model is calibrated to fit data for India, an approximately closed economy. Simulations suggest that fiscal policy certainly matters and the choice of the income taxation rate, the mix of government spending between infrastructure and public consumption goods, and the long-run government debt/GDP ratio can all significantly affect the long-run growth rate. Intertemporal aspects of fiscal policy are also important and the precommitment (time-inconsistent) and non-precommitment policies differ substantially.     

Measuring Technological Change in Greece

This paper uses the Growth Accounting methodology to estimate technological change, as well as labor and capital productivity in the various sectors of the Greek economy over the period 1988–1998. The results show that the technological level, as measured through annual growth in Total Factor Productivity, has remained practically unchanged. Meanwhile, technological change accounts for about 40% of economic growth, which is slightly lower compared with the relative performance of other O.E.C.D. countries. Finally, our main findings are, in general terms, consistent with estimates by other researchers.