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Growth accounting and endogenous technical change

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  • Chu, Angus C.
  • Cozzi, Guido

Abstract

This study explores growth accounting under endogenous technological progress. It is well known that the Solow approach overstates (understates) the contribution of capital accumulation (technological progress) to economic growth and that the Mankiw-Romer-Weil approach addresses this issue. However, we find that the Mankiw-Romer-Weil approach is inconsistent (consistent) with the lab-equipment (knowledge-driven) specification for technological progress. We also examine the importance of capital accumulation on growth in China under the two approaches.

Suggested Citation

  • Chu, Angus C. & Cozzi, Guido, 2016. "Growth accounting and endogenous technical change," Economics Letters, Elsevier, vol. 146(C), pages 147-150.
    • Handle: RePEc:eee:ecolet:v:146:y:2016:i:c:p:147-150
    DOI: 10.1016/j.econlet.2016.07.027
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    Cited by:

    1. Cozzi, Guido & Davenport, Margaret, 2017. "Extrapolative expectations and capital flows during convergence," Journal of International Economics, Elsevier, vol. 108(C), pages 169-190.
    2. Liu, Dayong & Xu, Chunfa & Yu, Yongze & Rong, Kaijian & Zhang, Junyan, 2020. "Economic growth target, distortion of public expenditure and business cycle in China," China Economic Review, Elsevier, vol. 63(C).
    3. Huang, Junbing & Cai, Xiaochen & Huang, Shuo & Tian, Sen & Lei, Hongyan, 2019. "Technological factors and total factor productivity in China: Evidence based on a panel threshold model," China Economic Review, Elsevier, vol. 54(C), pages 271-285.
    4. Chu, Angus C. & Cozzi, Guido, 2016. "Growth accounting and endogenous technical change," Economics Letters, Elsevier, vol. 146(C), pages 147-150.
    5. Wang, Lan-Hsun & Liao, Shu-Yi & Huang, Mao-Lung, 2022. "The growth effects of knowledge-based technological change on Taiwan’s industry: A comparison of R&D and education level," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 525-545.

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    More about this item

    Keywords

    Growth accounting; Endogenous technical change; Capital accumulation;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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