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A decomposition of economic growth decompositions

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  • Jan Oosterhaven

    (University of Groningen)

Abstract

This paper critically compares the ability of all three decomposition techniques that explain economic growth and its variation between regions and nations. Old time shift-and-share analysis (S&S) presumes that industry mix and regional competitiveness are all important. Structural decomposition analysis (SDA) presumes that final demand growth and input–output coefficient changes are all that matter. Growth accounting (GA) presumes the same for the growth of production factors and technological progress. This paper concludes that an econometric estimation of a GA equation without its residual factor productivity growth component, but with industry mix and demand components from S&Ss and SDAs, respectively, offers the best approach to explain longer term economic growth and variations therein.

Suggested Citation

  • Jan Oosterhaven, 2024. "A decomposition of economic growth decompositions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(4), pages 1395-1408, December.
    • Handle: RePEc:spr:anresc:v:73:y:2024:i:4:d:10.1007_s00168-024-01309-7
    DOI: 10.1007/s00168-024-01309-7
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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