IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-10-00752.html
   My bibliography  Save this article

A Note on Shock Persistence in Total Factor Productivity Growth

Author

Listed:
  • Tapas Mishra

    (Department of Economics, Swansea University, UK)

  • Bazoumana Ouattara

    (Department of Economics, Swansea University, UK)

  • Mamata Parhi

    (WISERD and Department of Economics, Swansea University, UK)

Abstract

We study implications of persistence of shocks in total factor productivity (TFP) growth under Bayesian framework for a set of African countries over the period 1970-2003. Contrary to convention, we find that stochastic unit root is present for most of the African countries and that there is time-varying dependence structure in the underlying processes. The implication of our finding is that the persistence process governing TFP series is non-linear, stationary for some period and (mildly) explosive for others pointing to the fact that linear policy rules to counteract stochastic shocks in TFP may not prove useful. The repeat of TFP cycles is traced to this behaviour.

Suggested Citation

  • Tapas Mishra & Bazoumana Ouattara & Mamata Parhi, 2011. "A Note on Shock Persistence in Total Factor Productivity Growth," Economics Bulletin, AccessEcon, vol. 31(2), pages 1869-1893.
    • Handle: RePEc:ebl:ecbull:eb-10-00752
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P169.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Bauwens, Luc & Lubrano, Michel & Richard, Jean-Francois, 2000. "Bayesian Inference in Dynamic Econometric Models," OUP Catalogue, Oxford University Press, number 9780198773139.
    3. Córdoba, Juan Carlos & Ripoll, Marla, 2008. "Endogenous TFP and cross-country income differences," Journal of Monetary Economics, Elsevier, vol. 55(6), pages 1158-1170, September.
    4. Ralf Martin, 2005. "Productivity Dispersion, Competition and Productivity Measurement," CEP Discussion Papers dp0692, Centre for Economic Performance, LSE.
    5. Schotman, Peter & van Dijk, Herman K., 1991. "A Bayesian analysis of the unit root in real exchange rates," Journal of Econometrics, Elsevier, vol. 49(1-2), pages 195-238.
    6. Davidson, James & Sibbertsen, Philipp, 2009. "Tests of bias in log-periodogram regression," Economics Letters, Elsevier, vol. 102(2), pages 83-86, February.
    7. Jesus Crespo Cuaresma & Tapas Mishra, 2011. "Human capital, age structure and growth fluctuations," Applied Economics, Taylor & Francis Journals, vol. 43(28), pages 4311-4329.
    8. Granger, C. W. J., 1980. "Long memory relationships and the aggregation of dynamic models," Journal of Econometrics, Elsevier, vol. 14(2), pages 227-238, October.
    9. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    10. Luis Gil-Alana & Pedro Mendi, 2005. "Fractional integration in total factor productivity: evidence from US data," Applied Economics, Taylor & Francis Journals, vol. 37(12), pages 1369-1383.
    11. Steven N. Durlauf, 1989. "Output Persistence, Economic Structure, and the Choice of Stabilization Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 69-136.
    12. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    2. Magnus, Jan R. & Powell, Owen & Prüfer, Patricia, 2010. "A comparison of two model averaging techniques with an application to growth empirics," Journal of Econometrics, Elsevier, vol. 154(2), pages 139-153, February.
    3. Sai Ding & John Knight, 2011. "Why has China Grown So Fast? The Role of Physical and Human Capital Formation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(2), pages 141-174, April.
    4. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    5. Razzak, W.A., 2007. "Explaining The Gaps In Labour Productivity In Some Developed Countries: New Zealand, Australia, The United States And Canada, 1988-2004," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(2).
    6. James Alm & Janet Rogers, 2011. "Do State Fiscal Policies Affect State Economic Growth?," Public Finance Review, , vol. 39(4), pages 483-526, July.
    7. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    8. Roberto Leon-Gonzalez & Daniel Montolio, 2004. "Growth, convergence and public investment. A Bayesian model averaging approach," Applied Economics, Taylor & Francis Journals, vol. 36(17), pages 1925-1936.
    9. David I. Stern, 2017. "The environmental Kuznets curve after 25 years," Journal of Bioeconomics, Springer, vol. 19(1), pages 7-28, April.
    10. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2024. "Health and economic growth: Reconciling the micro and macro evidence," World Development, Elsevier, vol. 178(C).
    11. G. Jones & T. Kane, 2012. "U.S. Troops and Foreign Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 225-249, June.
    12. Lennart F. Hoogerheide & Johan F. Kaashoek, 2004. "Functional Approximations to Likelihoods/Posterior Densities: A Neural Network Approach to Efficient Sampling," Computing in Economics and Finance 2004 74, Society for Computational Economics.
    13. Ruba Abdullah Aljarallah, 2020. "The Economic Impacts of Natural Resource Dependency in Gulf Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 36-52.
    14. Yin-Wong Cheung & Frank Westermann, 2002. "Output dynamics of the G7 countries--stochastic trends and cyclical movements," Applied Economics, Taylor & Francis Journals, vol. 34(18), pages 2239-2247.
    15. Arfat Ahmad Sofi & Subash Sasidharan & Mohammad Younus Bhat, 2023. "Economic growth and club convergence: Is there a neighbour's effect?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2475-2494, July.
    16. Bloom, David E. & Chen, Simiao & Kuhn, Michael & McGovern, Mark E. & Oxley, Les & Prettner, Klaus, 2020. "The economic burden of chronic diseases: Estimates and projections for China, Japan, and South Korea," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    17. Emanuele Felice, 2012. "Regional convergence in Italy, 1891–2001: testing human and social capital," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(3), pages 267-306, October.
    18. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    19. Steven N. Durlauf, 1993. "Nonergodic Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 349-366.
    20. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.

    More about this item

    Keywords

    Total factor productivity persistence; stochastic unit root; time varying dependence; Bayesian mechanism; Africa;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-10-00752. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.