Knowledge Spillovers and TFP Growth Rates

Núria Quella

No 09-03, Department of Economics Working Papers from Stony Brook University, Department of Economics

Abstract: In this paper I calibrate unobserved labor-generated knowledge spillovers within and between six large macroeconomic sectors covering the U.S. civilian economy from 1948 to 1991. Using quality-adjusted data I show that manufacturing and trade & transportation are the main source of knowledge flows to the overall economy for the entire period. However, the productivity slowdown of the early seventies coincides with trade & transportation taking over manufacturing as the main source and destination of post-73 knowledge flows. Furthermore, I compute the gap between the market and the optimal allocation of labor across sectors, and the wedge between market and optimal wages by sector. I find that, for the whole period, optimal employment in manufacturing and trade & transportation is, respectively, 20% and 27% above market. As a result optimal output in these sectors is 12% and 16% higher than the market’s, and optimal wages in manufacturing are 54% above market wages.

Keywords: Knowledge spillovers; productivity; human capital; learning; wages. (search for similar items in EconPapers)
JEL-codes: D24 J24 O30 O40 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-eff and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:nys:sunysb:09-03

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