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Marginal product of equipment and structures capital

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  • Mutreja, Piyusha

Abstract

Is physical capital efficiently allocated across countries? In this paper, I revisit this question and examine allocation of equipment and structures capital. I measure returns to equipment and structures capital for 91 countries in 2004. The return to equipment is higher in poor countries while the return to structures capital is similar across countries, implying a cross-country misallocation of equipment. Deadweight loss from the equipment misallocation is approximately 3.6 percent of the world income.

Suggested Citation

  • Mutreja, Piyusha, 2024. "Marginal product of equipment and structures capital," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523005116
    DOI: 10.1016/j.econlet.2023.111485
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    References listed on IDEAS

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    1. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
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    6. Piyusha Mutreja, 2014. "Equipment And Structures Capital: Accounting For Income Differences," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 713-731, April.
    7. Akos Valentinyi & Berthold Herrendorf, 2008. "Measuring Factor Income Shares at the Sector Level," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 820-835, October.
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    More about this item

    Keywords

    Machinery; Producer durables; Buildings; Capital flow;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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