1,721,059 research outputs found
The Marginal Product of Capital: A Persistent International Puzzle
Get PDFLarge and sustained differences in marginal products of capital (MPKs) across countries are sharply at odds with the core implications of the neoclassical framework. Lucas (1990) and many subsequent studies have examined reasons for this MPK differential. In a recent contribution, Caselli and Feyrer (2007) take the ground out from under this debate by reconsidering measurement issues and concluding that the MPK differential vanishes. Despite Caselli and Feyrer’s important advances in measurement, the international MPK puzzle persists. We show that the measurement of MPKs in their framework is substantially affected by adjustment costs in the accumulation of capital. With the proper technology and a plausible parameterization of adjustment costs, the MPK in poor countries is much higher than the MPK in rich countries. Why capital flows do not eliminate the MPK differential remains a persistent international puzzle. We examine the quantitative importance of financial frictions, relative prices, and adjustment costs in accounting for the MPK differential and document that adjustment costs provide the leading explanation.marginal product of capital, adjustment costs, macroeconomic analysis of economic development, international capital flows
The Fisher/Cobb-Douglas Paradox, Factor Shares, and Cointegration
Get PDFThis note uses insights from cointegration analysis to reexamine two separate but related issues concerning the estimation of production function parameters. Fisher (1971) documented a paradox in estimating substitution elasticities -- the puzzling divorce between the technology underlying his simulated data and the technology estimated from these data. This note both resolves the Paradox and, based on this resolution, raises important questions about estimation strategies (pioneered by Caballero, 1994) that rely on cointegration to recover production function parameters.production function elasticities, cointegration
The Elasticity of Derived Demand, FactorSubstitution and Product Demand: Corrections to Hicks’ Formula and Marshall’s Four Rules
Get PDFNearly 75 years ago, John Hicks introduced and formalized the concept of the elasticity of substitution between capital and labour and its relation to derived demand. The resulting formula has proven very useful in understanding the derived demand for productive factors, the distribution of factor incomes, and Marshall's Four Rules. This short paper notes that a slip occurred in the original derivation, presents a modified formula, and shows that Marshall's First Rule is no longer generally valid.derived demand, substitution elasticity, John Hicks
Marginal and Interaction Effects in Ordered Response Models
Get PDFIn discrete choice models the marginal effect of a variable of interest that is interacted with another variable differs from the marginal effect of a variable that is not interacted with any variable. The magnitude of the interaction effect is also not equal to the marginal effect of the interaction term. I present consistent estimators of both marginal and interaction effects in ordered response models. This procedure is general and can easily be extended to other discrete choice models. I also provide an example using household survey data on food security in Bangladesh. Results show that marginal effects of interaction terms are estimated by standard statistical software (STATA® 10) with very large error and even with wrong sign.Marginal effect, interaction effect, ordered probit, discrete choice.
The growth-volatility relationship redux: what does volatility decomposition tell?
No full textAbstract
This paper revisits the empirical relationship between volatility and long-run growth, but the key contribution lies in decomposing growth volatility into its business-cycle and trend components. This volatility decomposition also accounts for enormous heterogeneity among countries in terms of their long-run growth trajectories. We identify a negative effect of trend volatility, which we refer to as long-run volatility, on growth, but no effect of business-cycle volatility. However, if long-run volatility is omitted, there would be a spurious (negative) effect of business-cycle volatility. Our results draw attention to a crucial question about different volatility measures and their implications in macroeconomic analyses.</jats:p
The Role of Elasticity of Substitution in Economic Growth: A Cross-Country Test of the La Grandville Hypothesis
Get PDFThe elasticity of substitution between capital and labor (σ) is a second-order parameter of the production function but has a first-order effect on economic growth. Although the importance of this elasticity has long been recognized in several branches of economics, it has received too little attention in the growth literature. Grandville (1989) showed theoretically that at any stages of an economyâs development, the growth rate of income per capita is increasing with σ. The higher is σ, the greater the similarity between capital and labor in the production function, and thus diminishing returns sets-in very slowly. To the best of our knowledge, this is the first paper that tests the Grandville hypothesis at the cross-country level. We estimate σ for 90 countries from direct estimation of the normalized CES production function and then include these estimators as an explanatory variable in cross-country growth regression. We investigate the sign and significance of the coefficient of σ conditioning on country characteristics, initial conditions, institutions and a set of policy variables. Since the unobservable σ is âgeneratedâ from the first-step estimation of the CES production function, in the second-step cross-country growth regression it is measured with sampling errors (Pagan, 1984; Murphy and Topel, 1985). After accounting for measurement errors and other sources of endogeneity, we find strong support for the de La Grandville hypothesis. We find that σ can explains about 30% of the growth rate differential between East Asia and Sub-Sahara Africa. We check the robustness of our results by Leamerâs (1983) extreme value analysis, and the coefficient of σ remains positive and the t-statistics remain large for all combinations of the conditioning variables.
Going Beyond Counting First Authors in Author Co-citation Analysis
Get PDFThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Variations on the Author
Get PDF“Variations on the Author” discusses two of Eduardo Coutinho’s recent films (Um Dia na Vida, from 2010, and Últimas Conversas, posthumously released in 2015) and their contribution to the general question of documentary authorship. The director’s filmography is characterized by a consistent yet self-effacing form of authorial self-inscription: Coutinho often features as an interviewer that rather than express opinions propels discourses; an interviewer that is good at listening. This mode of self-inscription characterizes him as an author who is not expressive but who is nonetheless markedly present on the screen. In Um Dia na Vida, however, Coutinho is completely absent form the image, while Últimas Conversas, on the contrary, includes a confessional prologue that moves the director from the margins to the center of his films. This article examines the ways in which these works stand out in the filmography of a director who offers new insights into the notion of cinematic authorship
- …
