IS NEWER ALWAYS BETTER? A REINVESTIGATION OF PRODUCTIVITY DYNAMICS

Yan Meng (), Christopher F. Parameter () and Valentin Zelenyuk
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Yan Meng: University of Melbourne
Christopher F. Parameter: Miami Herbert Business School, University of Miami
Authors registered in the RePEc Author Service: Christopher Parmeter

No WP062021, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: Understanding the drivers of productivity remains one of the most sought after phenomena in economics. The ability to create produce more from less resources is undoubtedly appealing. Using recently updated Penn World Table data, we investigate to what degree previous results using a popular productivity decomposition are maintained. We find that, contrary to conclusions from earlier work, technical efficiency (catching up) played a more pronounced role in the global increase in productivity over the 1965-1990 period. We also find a larger effect for technical change than earlier work and a far lesser role for capital deepening. This suite of results augurs the coming information age that placed less weight on physical capital to createand sustain wealth. Taken together our findings here suggest that as data collection, its quality and evaluation methods evolve, so too will our understanding of productivity dynamics.

Date: 2021-05
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:160

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