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The Determinants of Distribution Dynamics: A Novel Methodology with an Application to the Cross-Country Distribution of Productivity Preliminary version. Please do not quote without permission)

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  • Davide Fiaschi
  • Angela Parenti

Abstract

In this paper we present a novel methodology for estimating the determinants of distribution dynamics and discuss an application to the distribution dynamics of (labour) productivity across a large sample of countries. We perform a Monte Carlo study of methodology taking as base Mankiw et al. (1992)’s model. We finally apply the methodology to a sample of 84 countries for the period 1960-2006. The level of output per worker in 1960 strongly contributed to reduce inequality. All the other variables (unexplained source of high-productivity, human capital, investment rate, employment growth) positively contributed (in decreasing order of importance) to inequality. Both the unexplained source of high-productivity and the level of output per worker in 1960 increased polarization. Also investment rate favoured polarization, but the such effect appears not statistically significant. Finally human capital and employment growth appear not to affect the polarization of distribution.

Suggested Citation

  • Davide Fiaschi & Angela Parenti, 2010. "The Determinants of Distribution Dynamics: A Novel Methodology with an Application to the Cross-Country Distribution of Productivity Preliminary version. Please do not quote without permission)," DEGIT Conference Papers c015_020, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c015_020
    as

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    File URL: http://degit.sam.sdu.dk/papers/degit_15/c015_020.pdf
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    References listed on IDEAS

    as
    1. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    2. Quah, Danny, 1997. "Empirics for growth and distribution," LSE Research Online Documents on Economics 2138, London School of Economics and Political Science, LSE Library.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    4. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    5. Danny Quah, 1997. "Empirics for Growth and Distribution," CEP Discussion Papers dp0324, Centre for Economic Performance, LSE.
    6. Quah, Danny T, 1996. "Convergence Empirics across Economies with (Some) Capital Mobility," Journal of Economic Growth, Springer, vol. 1(1), pages 95-124, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    convergence; inequality; distribution dynamics; polarization; nonparametric methods.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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