Intangible Capital and International Income Differences

Aamir Rafique Hashmi ()

Departmental Working Papers from National University of Singapore, Department of Economics

Abstract: I add intangible capital to a variant of the neoclassical growth model and study the implications for cross-country income differences. I calibrate the parameters associated with intangible capital by using new estimates of investment in intangibles by Corrado et al. (2006). When intangible capital is added to the model, the TFP elasticity of output increases from 2.14 to 2.64. This finding implies that the addition of intangible capital increases the ability of the neoclassical growth model to explain international income differences by more than a factor of two.

Keywords: International Income Differences; Intangible Capital (search for similar items in EconPapers)
JEL-codes: O33 O41 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-dge and nep-soc
Date: 2008-06
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Persistent link: http://EconPapers.repec.org/RePEc:nus:nusewp:wp0801

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