Structural Change and Cross-Country Growth Empirics
One of the most striking features of economic growth is the process of structural change whereby the share of agriculture in GDP decreases as countries develop. The cross-country growth literature typically estimates an aggregate homogeneous production function or convergence regression model that a...
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Oxford University Press on behalf of the World Bank
2014
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| Online Access: | http://hdl.handle.net/10986/21006 |
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okr-10986-210062021-04-23T14:04:01Z Structural Change and Cross-Country Growth Empirics Eberhardt, Markus Teal, Francis aggregate functions agriculture business cycles dual economy econometric modeling economic theory factor demand GDP output growth rate human capital inventory national income production function productivity structural change total factor productivity value added wealth One of the most striking features of economic growth is the process of structural change whereby the share of agriculture in GDP decreases as countries develop. The cross-country growth literature typically estimates an aggregate homogeneous production function or convergence regression model that abstracts from the process of structural change. In this paper, we investigate the extent to which assumptions about aggregation and homogeneity matter for inferences regarding the nature of technology differences across countries. Using a unique World Bank dataset, we estimate production functions for agriculture and manufacturing in a panel of 40 developing and developed countries for the period from 1963 to 1992. We empirically model dimensions of heterogeneity across countries, allowing for different choices of technology within both sectors. We argue that heterogeneity is important within sectors across countries implying that an analysis of aggregate data will not produce useful measures of the nature of the technology or productivity. We show that many of the puzzling elements in aggregate cross-country empirics can be explained by inappropriate aggregation across heterogeneous sectors. 2014-12-30T17:44:25Z 2014-12-30T17:44:25Z 2013-06 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/21006 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
en_US |
| topic |
aggregate functions agriculture business cycles dual economy econometric modeling economic theory factor demand GDP output growth rate human capital inventory national income production function productivity structural change total factor productivity value added wealth |
| spellingShingle |
aggregate functions agriculture business cycles dual economy econometric modeling economic theory factor demand GDP output growth rate human capital inventory national income production function productivity structural change total factor productivity value added wealth Eberhardt, Markus Teal, Francis Structural Change and Cross-Country Growth Empirics |
| description |
One of the most striking features of economic growth is the process of structural change whereby the share of agriculture in GDP decreases as countries develop. The cross-country growth literature typically estimates an aggregate homogeneous production function or convergence regression model that abstracts from the process of structural change. In this paper, we investigate the extent to which assumptions about aggregation and homogeneity matter for inferences regarding the nature of technology differences across countries. Using a unique World Bank dataset, we estimate production functions for agriculture and manufacturing in a panel of 40 developing and developed countries for the period from 1963 to 1992. We empirically model dimensions of heterogeneity across countries, allowing for different choices of technology within both sectors. We argue that heterogeneity is important within sectors across countries implying that an analysis of aggregate data will not produce useful measures of the nature of the technology or productivity. We show that many of the puzzling elements in aggregate cross-country empirics can be explained by inappropriate aggregation across heterogeneous sectors. |
| format |
Journal Article |
| author |
Eberhardt, Markus Teal, Francis |
| author_facet |
Eberhardt, Markus Teal, Francis |
| author_sort |
Eberhardt, Markus |
| title |
Structural Change and Cross-Country Growth Empirics |
| title_short |
Structural Change and Cross-Country Growth Empirics |
| title_full |
Structural Change and Cross-Country Growth Empirics |
| title_fullStr |
Structural Change and Cross-Country Growth Empirics |
| title_full_unstemmed |
Structural Change and Cross-Country Growth Empirics |
| title_sort |
structural change and cross-country growth empirics |
| publisher |
Oxford University Press on behalf of the World Bank |
| publishDate |
2014 |
| url |
http://hdl.handle.net/10986/21006 |
| _version_ |
1764447709184393216 |