Aoki, Shuhei (2008): A Simple Accounting Framework for the Effect of Resource Misallocation on Aggregate Productivity.
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This paper develops a simple accounting framework that measures the effect of resource misallocation on aggregate productivity. This framework is based on a multi-sector general equilibrium model with sector-specific frictions in the form of taxes on sectoral factor inputs. Our framework is flexible for the assumption on preferences or aggregate production functions. Moreover, this framework is consistent with that commonly used in productivity analysis. I apply this framework to measure to what extent resource misallocation explains the differences in aggregate productivity across developed countries. I find that resource misallocation explains, on average, about 25% of the differences in the measured aggregate productivity among developed countries. I also provide methods to decompose the causes of the misallocation effect.
|Item Type:||MPRA Paper|
|Original Title:||A Simple Accounting Framework for the Effect of Resource Misallocation on Aggregate Productivity|
|Keywords:||distortions; frictions; productivity; resource allocation|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E23 - Production
|Depositing User:||Shuhei Aoki|
|Date Deposited:||11. Nov 2008 03:17|
|Last Modified:||16. Feb 2013 15:25|
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