Capital goods, measured TFP and growth: The case of Spain

Antonia Díaz and Luis Franjo

European Economic Review, 2016, vol. 83, issue C, 19-39

Abstract: The effect of investing in equipment and/or structures on TFP and long run growth is investigated here. We argue that economies can grow in spite of stagnant TFP if the investment rate is inefficiently high. We study the case of Spain where real GDP per worker grew at 2.74 percent annually and TFP was stagnant during 1996–2007. We show that low Spanish TFP is due to low ISTC and an inefficiently high investment in residential structures. We quantify the effect of the housing boom of the 2000s, the total cost of subsidies to residential structures in terms of TFP and income growth.

Keywords: Spain; Total Factor Productivity; Growth accounting; Investment Specific Technical Change; Applied general equilibrium (search for similar items in EconPapers)
JEL-codes: E01 E13 E32 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Capital goods, measured TFP and growth: The case of Spain (2014)
Working Paper: Capital goods, measured TFP and growth: the case of Spain (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:83:y:2016:i:c:p:19-39

DOI: 10.1016/j.euroecorev.2015.11.009

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