Dr MARKUS EBERHARDT MARKUS.EBERHARDT@NOTTINGHAM.AC.UK
Associate Professor
Structural change and cross-country growth empirics
Eberhardt, Markus; Teal, Francis
Authors
Francis Teal
Abstract
One of the most striking features of economic growth is the process of structural change whereby the share of agriculture in GDP decreases as countries develop. The cross-country growth literature typically estimates an aggregate homogeneous production function or convergence regression model that abstracts from the process of structural change. In this paper, we investigate the extent to which assumptions about aggregation and homogeneity matter for inferences regarding the nature of technology differences across countries. Using a unique World Bank dataset, we estimate production functions for agriculture and manufacturing in a panel of 40 developing and developed countries for the period from 1963 to 1992. We empirically model dimensions of heterogeneity across countries, allowing for different choices of technology within both sectors. We argue that heterogeneity is important within sectors across countries implying that an analysis of aggregate data will not produce useful measures of the nature of the technology or productivity. We show that many of the puzzling elements in aggregate cross-country empirics can be explained by inappropriate aggregation across heterogeneous sectors. © The Author 2012. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved.
Citation
Eberhardt, M., & Teal, F. (2013). Structural change and cross-country growth empirics. World Bank Economic Review, 27(2), 229-271. https://doi.org/10.1093/wber/lhs020
Journal Article Type | Article |
---|---|
Online Publication Date | Oct 28, 2012 |
Publication Date | Jun 1, 2013 |
Deposit Date | Mar 26, 2021 |
Journal | World Bank Economic Review |
Print ISSN | 0258-6770 |
Electronic ISSN | 1564-698X |
Publisher | Oxford University Press |
Peer Reviewed | Peer Reviewed |
Volume | 27 |
Issue | 2 |
Pages | 229-271 |
DOI | https://doi.org/10.1093/wber/lhs020 |
Public URL | https://nottingham-repository.worktribe.com/output/3182506 |
Publisher URL | https://academic.oup.com/wber/article-abstract/27/2/229/1620778?redirectedFrom=fulltext |
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