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Second thoughts on development accounting

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  • Gundlach, Erich
  • Rudman, Desmond
  • Wößmann, Ludger

Abstract

The relative roles of factor inputs and productivity are estimated in explaining the level of economic development. For a large sample of countries, it is shown that international differences in factor inputs account for between two thirds and three quarters of international differences in output per worker if alternative identifying productivity assumptions and a quality-adjusted measure of human capital are employed. For a sample of OECD countries, it is found that all differences in output per worker can be attributed to differences in factor inputs, leaving no role for international productivity differences. This result supports the reasoning of a traditional neoclassical growth model.

Suggested Citation

  • Gundlach, Erich & Rudman, Desmond & Wößmann, Ludger, 2002. "Second thoughts on development accounting," Munich Reprints in Economics 20436, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20436
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    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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