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Variable Factor Shares and the Index Number Problem: A Generalization
Abstract

Factor shares vary over time and across countries, so incorporating variable factor shares into growth and development accounting is both warranted and desirable.  However, variable factor shares create an index number problem in analyses relying on our most commonly used production functions.  We show that in the presence of competitive factor markets, the problem exists for all workhorse production functions exhibiting constant returns to scale. Therefore, any efforts to align empirical growth research with the reality of the factor share data cannot be carried out using standard techniques.  New techniques need to be developed.

Autores:
Brad Sturgill y Hernando Zuleta
Palabras clave:
Factor Shares, Growth Accounting, Production Function, Index Numbers
Archivo:
Año:
2016
Mes:
Agosto
Número:
27