The Marginal Product of Capital

Francesco Caselli ()
Authors registered in the RePEc Author Service: James Feyrer

The Quarterly Journal of Economics, 2007, vol. 122, issue 2, pages 535-568

Abstract: Whether or not the marginal product of capital (MPK) differs across countries is a question that keeps coming up in discussions of comparative economic development and patterns of capital flows. Using easily accessible macroeconomic data we find that MPKs are remarkably similar across countries. Hence, there is no prima facie support for the view that international credit frictions play a major role in preventing capital flows from rich to poor countries. Lower capital ratios in these countries are instead attributable to lower endowments of complementary factors and lower efficiency, as well as to lower prices of output goods relative to capital. We also show that properly accounting for the share of income accruing to reproducible capital is critical to reach these conclusions. One implication of our findings is that increased aid flows to developing countries will not significantly increase these countries' capital stocks and incomes. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2007
View citations in EconPapers

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdfplus/10.1162/qjec.122.2.535 link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Marginal Product of Capital (2005)
Working Paper: The Marginal Product of Capital (2006)
Working Paper: The Marginal Product of Capital (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:tpr:qjecon:v:122:y:2007:i:2:p:535-568

Ordering information: This journal article can be ordered from
http://mitpress.mit. ... me.tcl?issn=00335533

Access Statistics for this article

The Quarterly Journal of Economics is edited by Robert J. Barro, Edward L. Glaeser and Lawrence F. Katz

More articles in The Quarterly Journal of Economics from MIT Press
Series data maintained by Christopher F. Baum ().