Variable factor shares and the index number problem: a generalization
Factor shares vary over time and across countries, so incorporating variable factor shares into growth and development accounting is both warranted and desirable. However, variable factor shares create an index number problem in analyses relying on our most commonly used production functions. We sho...
- Autores:
-
Sturgill, Brad - 1981
Zuleta González, Hernando
- Tipo de recurso:
- Work document
- Fecha de publicación:
- 2016
- Institución:
- Universidad de los Andes
- Repositorio:
- Séneca: repositorio Uniandes
- Idioma:
- eng
- OAI Identifier:
- oai:repositorio.uniandes.edu.co:1992/8664
- Acceso en línea:
- http://hdl.handle.net/1992/8664
- Palabra clave:
- Factor shares
Growth accounting
Production function
Index numbers
Crecimiento económico - Modelos econométricos
Factores de producción - Modelos econométricos
Rentas nacionales - Contabilidad
O11, O30, O41, O47, E01, E25
- Rights
- openAccess
- License
- http://creativecommons.org/licenses/by-nc-nd/4.0/
| Summary: | Factor shares vary over time and across countries, so incorporating variable factor shares into growth and development accounting is both warranted and desirable. However, variable factor shares create an index number problem in analyses relying on our most commonly used production functions. We show that in the presence of competitive factor markets, the problem exists for all workhorse production functions exhibiting constant returns to scale. Therefore, any efforts to align empirical growth research with the reality of the factor share data cannot be carried out using standard techniques. New techniques need to be developed. |
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