It's Not Factor Accumulation : Stylized Facts and Growth Models

It's Not Factor Accumulation : Stylized Facts and Growth Models

The article documents five stylized facts of economic growth: (1) the 'residual' (total factor productivity, tfp) rather than factor accumulation accounts for most of the income and growth differences across countries; (2) income diverges...

Full description

Bibliographic Details
Main Authors:	Easterly, William, Levine, Ross
Format:	Journal Article
Language:	English en_US
Published:	Washington, DC: World Bank 2014
Subjects:	AGGREGATE GROWTH AGGREGATE PRODUCTION FUNCTION ANNUAL GROWTH AVERAGE GROWTH AVERAGE GROWTH RATE BLACK MARKET BUSINESS CYCLES CAPITA INCOME CAPITA INCOMES CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GROWTH CAPITAL INCOME CAPITAL INFLOWS CAPITAL INVESTMENT CAPITAL STOCK CLOSED ECONOMY CONDITIONAL CONVERGENCE CONSTANT RETURNS CONSTANT RETURNS TO SCALE COST REDUCTIONS COUNTRY DATA COUNTRY REGRESSIONS COUNTRY VARIATION COUNTRY-SPECIFIC EFFECTS CROSS-COUNTRY DATA CROSS-COUNTRY DIFFERENCES CROSS-COUNTRY INCOME CROSS-COUNTRY RELATIONSHIP DATA AVAILABILITY DATA SETS DECREASING RETURNS DEPENDENT VARIABLE DETERMINANTS OF GROWTH DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT PRACTITIONERS DEVELOPMENT REPORT DEVELOPMENT RESEARCH DIFFERENCES IN INCOME DIMINISHING RETURNS DYNAMIC PANEL ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC PHENOMENA ECONOMIC PROGRESS ECONOMIC REVIEW ECONOMIC TAKEOFF ECONOMICS ECONOMIES OF SCALE EDUCATIONAL ATTAINMENT EMPIRICAL LITERATURE EMPIRICAL REGULARITIES EMPIRICAL RESEARCH EMPIRICAL WORK ENDOGENOUS GROWTH ERROR TERM EXCHANGE RATE EXOGENOUS FACTORS EXPLANATORY VARIABLES EXPORTS EXTERNALITIES FACTOR ACCUMULATION FACTOR GROWTH FACTOR MOVEMENT FACTORS OF PRODUCTION FINANCIAL DEVELOPMENT FISCAL POLICY FIXED COSTS FIXED EFFECTS FLOW OF CAPITAL FOREIGN DIRECT INVESTMENT FUTURE GROWTH FUTURE RESEARCH GDP GDP PER CAPITA GEOGRAPHIC CONCENTRATION GLOBAL LEVEL GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH ACCOUNTING GROWTH MODEL GROWTH MODELS GROWTH PATH GROWTH PERIOD GROWTH RATE GROWTH RATE OF OUTPUT GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS GROWTH THEORY HETEROSKEDASTICITY HIGH CONCENTRATION HIGH CONCENTRATIONS HOUSEHOLD INCOME HUMAN CAPITAL INCOME DATA INCOME DIFFERENCES INCOME DIFFERENTIALS INCOME PER CAPITA INCOME QUINTILES INCREASING RETURNS INDIVIDUAL COUNTRIES INDUSTRIALIZED COUNTRIES INEQUALITY INEQUALITY MODEL INFLATION RATE INTERNATIONAL OPENNESS INTERNATIONAL ORGANIZATIONS INTERNATIONAL TRADE INTERTEMPORAL VARIATION INVENTORY INVESTMENT RATE LABOR FORCE LABOR INPUT LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LINEAR REGRESSION LINEAR RELATIONSHIP LOG INCOME LONG RUN LONG-RUN GROWTH LOW-INCOME COUNTRIES MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MEASUREMENT ERROR MEASUREMENT PROBLEMS MIDDLE-INCOME COUNTRY MODEL OF GROWTH MULTIPLE EQUILIBRIA NATIONAL INCOME NATIONAL OUTPUT NATIONAL POLICIES NEGATIVE IMPACT NEGATIVE LINK NEIGHBORHOOD EXTERNALITIES NEOCLASSICAL GROWTH NEOCLASSICAL GROWTH MODEL NEOCLASSICAL MODEL 0 HYPOTHESIS OPEN ECONOMY OUTPUT GROWTH OUTPUT PER CAPITA OUTPUT RATIO PER CAPITA GROWTH PER CAPITA INCOME PER CAPITA INCOMES PERFECT COMPETITION POLICY INDICATORS POLITICAL STABILITY POOR AREAS POOR COUNTRIES POOR PEOPLE POPULATION GROWTH POSITIVE CORRELATION POSITIVE GROWTH POSITIVE IMPACT POSITIVE RELATIONSHIP POVERTY RATE POVERTY RATES POVERTY TRAPS PRIMARY EDUCATION PRIMARY ENROLLMENT PRIVATE SAVING PRIVATE SECTOR PRODUCTIVE ASSETS PROMOTING GROWTH PROPERTY RIGHTS PUBLIC GOODS PUBLIC INVESTMENT PUBLIC POLICY PURCHASING POWER RATE OF GROWTH RATE OF INVESTMENT RATE OF RETURN REAL GDP REAL INCOME REAL OUTPUT REAL WAGE REGIONAL DIFFERENCES REGRESSION RESULTS RELATIVE IMPORTANCE RICH COUNTRIES SAVING RATE SAVINGS SECONDARY ENROLLMENT SERIAL CORRELATION SHARE OF OUTPUT SIGNIFICANT CORRELATION SKILL PREMIUM SKILLED WAGE SKILLED WAGES SKILLED WORKERS STANDARD DEVIATION TECHNOLOGICAL CHANGE TECHNOLOGICAL PROGRESS TFP TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH UNSKILLED LABOR WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2001/05/17737307/not-factor-accumulation-stylized-facts-growth-models-learned-decade-empirical-research-growth http://hdl.handle.net/10986/17440

Description
Summary:	The article documents five stylized facts of economic growth: (1) the 'residual' (total factor productivity, tfp) rather than factor accumulation accounts for most of the income and growth differences across countries; (2) income diverges over the long run; (3) factor accumulation is persistent while growth is not, and the growth path of countries exhibits remarkable variation; (4) economic activity is highly concentrated, with all factors of production flowing to the richest areas; and (5) national policies are closely associated with long-run economic growth rates. These facts do not support models with diminishing returns, constant returns to scale, some fixed factor of production, or an emphasis on factor accumulation. However, empirical work does not yet decisively distinguish among the different theoretical conceptions of tfp growth. Economists should devote more effort toward modeling and quantifying tfp.

Cannot write session to /tmp/vufind_sessions/sess_idds3q83prqo0ap5agbr1vot5j