Structural Change and
            Cross-Country Growth Empirics

Eberhardt, Markus; Teal, Francis

Structural Change and Cross-Country Growth Empirics

Autores

Eberhardt, Markus

Teal, Francis

Editor

World Bank, Washington, DC

Descripción

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 this process of structural change. This paper investigates 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, it estimates production functions for agriculture and manufacturing in a panel of 40 developing and developed countries for the period from 1963 to 1992. It empirically models dimensions of heterogeneity across countries, allowing for different choices of technology within both sectors. The paper argues 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. It shows that many of the puzzling elements in aggregate cross-country empirics can be explained by inappropriate aggregation across heterogeneous sectors.

Palabras clave

AGGREGATE FUNCTIONS, AGGREGATE PRODUCTION FUNCTION, AGRICULTURE, APPROPRIATE TECHNOLOGY, AVAILABILITY OF DATA, BANDWIDTH, BASE YEAR, BENCHMARK, BI, BIASES, BUSINESS CYCLES, CAPACITY BUILDING, CAPITAL STOCK, CAPITAL-LABOR, CAPITAL-LABOR RATIOS, CD, COINTEGRATION, COMMON DENOMINATOR, CONFIDENCE INTERVALS, CONSTANT RETURNS, CONSTANT RETURNS TO SCALE, CULTURAL CHANGE, DATA ANALYSIS, DATA LIMITATIONS, DATA SOURCES, DECREASING RETURNS, DEFLATION, DEFLATORS, DESCRIPTIVE STATISTICS, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DIFFUSION INDEXES, DUAL ECONOMY, ECONOMETRIC MODELING, ECONOMETRICS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC HISTORY, ECONOMIC PERFORMANCE, ECONOMIC STATISTICS, ECONOMIC SURVEYS, ECONOMIC THEORY, ELASTICITY, EMPIRICAL METHODS, EQUATIONS, EXCHANGE RATE, EXCHANGE RATES, EXTERNALITIES, FACTOR ACCUMULATION, FACTOR ANALYSIS, FACTOR DEMAND, FINANCIAL CRISIS, GDP, GDP PER CAPITA, GLOBALIZATION, GROWTH ACCOUNTING, GROWTH ANALYSIS, GROWTH LITERATURE, GROWTH MODEL, GROWTH MODELS, GROWTH RATE, GROWTH RATES, GROWTH REGRESSIONS, HUMAN CAPITAL, HYPOTHESES, IMPLEMENTATIONS, INCOME PER CAPITA, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDEPENDENT VARIABLES, INDUSTRIALIZATION, INNOVATION, INSTRUMENTAL VARIABLES, INTERNATIONAL COMPARISONS, INTERNATIONAL INVESTMENT, INVENTORY, LABOR FORCE, LESS DEVELOPED COUNTRIES, LINEAR REGRESSION, LOGARITHMS, LOW INTEREST RATE, MACROECONOMIC FORECASTING, MACROECONOMICS, MANUFACTURING, MATRIX, NATIONAL INCOME, NATURAL RESOURCES, ONLINE DATABASE, OPEN ACCESS, OUTLIERS, OUTPUT STRUCTURE, POLITICAL ECONOMY, PRIVATE SECTOR, PRODUCTION FUNCTION, PRODUCTION FUNCTIONS, PRODUCTION PROCESS, PRODUCTIVITY, PRODUCTIVITY GROWTH, PURCHASING POWER, PURCHASING POWER PARITY, R&AMP;D, RANDOM WALKS, REAL GDP, RESULT, RESULTS, RETURNS TO SCALE, SIMULTANEOUS EQUATIONS, STANDARD ERRORS, STATA, STRUCTURAL CHANGE, TECHNICAL PROGRESS, TECHNOLOGICAL PROGRESS, TFP, TIME PERIOD, TIME PERIODS, TIME SERIES, TOTAL FACTOR PRODUCTIVITY, TRANSMISSION, UNDUE INFLUENCE, USES, VALIDITY, VALUE ADDED, VARIABILITY, WEALTH, WEB