Accounting for Growth With New Inputs

Robert Feenstra and James Markusen

No 4114, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we examine how to account for growth when new inputs are being created. In particular, we obtain a decomposition of growth into that due to a higher quantity of existing inputs, and that due to a greater range of inputs. This decomposition is first obtained for a single firm, with a CES production function. We then generalize to the GNP function of an economy. and again show how a decomposition of growth in GNP can be obtained. An example is presented of a two-sector economy, where new inputs are endogenously created each period, and a simple aggregate production function exists. Data for this economy are simulated, and the GNP function is estimated using various different measures of the factor inputs.

Date: 1992-07
Note: PR ITI
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Citations: View citations in EconPapers (89)

Published as International Economic Review, May 1994, vol 35, no 2, pp 429-447

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Related works:
Journal Article: Accounting for Growth with New Inputs (1994)
Working Paper: Accounting for Growth with New Inputs (1991)
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