TY - JOUR
T1 - Growth and capital deepening since 1870
T2 - Is it all technological progress?
AU - Madsen, Jakob B.
PY - 2010/6/1
Y1 - 2010/6/1
N2 - Based on an asset pricing model, this paper shows that traditional growth accounting exercises attribute too much weight to capital deepening and suggests a method to filter out TFP-induced capital deepening from the estimates. Using data for 16 industrialised countries, it is shown that labour productivity and capital deepening have been driven by total factor productivity and reductions in the required stock returns over the past 137 years. Furthermore, it is shown that TFP precedes the K-L ratio and not the other way around.
AB - Based on an asset pricing model, this paper shows that traditional growth accounting exercises attribute too much weight to capital deepening and suggests a method to filter out TFP-induced capital deepening from the estimates. Using data for 16 industrialised countries, it is shown that labour productivity and capital deepening have been driven by total factor productivity and reductions in the required stock returns over the past 137 years. Furthermore, it is shown that TFP precedes the K-L ratio and not the other way around.
KW - Endogeneity
KW - Growth accounting
KW - Required stock returns
KW - TFP growth
UR - http://www.scopus.com/inward/record.url?scp=77951878867&partnerID=8YFLogxK
U2 - 10.1016/j.jmacro.2009.10.004
DO - 10.1016/j.jmacro.2009.10.004
M3 - Article
AN - SCOPUS:77951878867
SN - 0164-0704
VL - 32
SP - 641
EP - 656
JO - Journal of Macroeconomics
JF - Journal of Macroeconomics
IS - 2
ER -