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Common and idiosyncratic shocks to labor productivity across sectors and countries: Is climate relevant?

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  • Luciano Gutierrez

    (University of Sassari)

Abstract

We use two methodologies, the least square dummy variables approach and the dynamic factor models, to decompose the labor productivity growth rate for a large sample of countries into common, i.e. global, and idiosyncratic, i.e. country, components. We find that country specific effects are much more important than common effects in explaining labor productivity. The interesting result is that, when splitting the sample of countries into those located in temperate zones and those located in tropical zones, we find that the common component plays a larger role in temperate countries. Thus, given the wide gap in labor productivity between the two climatic zones, policy should be targeted on developing technologies for tropical zones and/or on helping them to absorb R&D targeted for temperate countries

Suggested Citation

  • Luciano Gutierrez, 2003. "Common and idiosyncratic shocks to labor productivity across sectors and countries: Is climate relevant?," Macroeconomics 0311008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0311008
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    More about this item

    Keywords

    Labor productivity; Decomposition; Dynamic factors; Panel unit roots.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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