Verdoorn’s law and productivity dynamics: An empirical investigation into the demand and supply approaches

According to Verdoorn’s law, productivity growth is endogenous to output growth, due to the existence of increasing returns to scale, broadly defined. Such an idea is at the root of both the endogenous growth theory and the Kaldorian approach. While in Kaldor’s view, a country’s growth is demand-driven, in the endogenous growth theory, growth is determined by the growth of the factors of production and hence growth is supply-constrained. This article empirically tests both assumptions for Verdoorn’s law by using a dynamic panel of manufacturing industries for seventy countries at different stages of development for the years between 1963 and 2009. In order to distinguish between these approaches, two different specifications are estimated where the growth of output and the supply of factors of production are instrumentalized by system generalized method of moments (GMM)estimators. The results show that, if it is assumed that the growth rates of countries are demand-driven, a faster growth of output increases productivity growth due to the existence of increasing returns. Alternatively, if it is assumed that output growth is driven by the growth of the supply of the factors of production, it is not possible to conclude that productivity growth is induced by output growth.     

Capital accumulation,output growth and disparities in labour productivity among Canadian regions

This paper extends the original formulation of the Verdoorn Law and derives a productivity equation in order to measure the effects of capital accumulation, scale economies, and technical progress on growth of productivity in the manufacturing sector of six Canadian regions. Productivity growth appears to be strongly influenced by growth of output but the impact of capital accumulation, although small, is not negligible. The results also indicate that there is evidence of substantial economies of scale in all regions and, contrary to common belief, that productivity growth rate adjusted for cyclical variations continued to decline during the 1980s. The fall in the output growth rate is found to be responsible for most of this decline     

Competition,Fisher's Principle and increasing returns in the selection process

This paper explores the relationship between increasing returns and structural change in the context of an explicitly evolutionary model. The central theme concerns the behaviour of a population of competing firms which is elaborated in terms of Fisher's Principle, the rate of change of the moments of this population distribution are functionally related to higher order moments of the. distribution. Different kinds of increasing returns are distinguished and it is shown how they influence the dynamics of selection. The basic principles here are those of replicator dynamic, systems, and it is shown how the Fisher Principle interacts with the more familiar Kaldor/Verdoorn principles of endogenous growth.     

The Verdoorn law revisited: A note

In his Fattori che regolano lo sviluppo della produttività del lavoro Verdoorn (1949) presented empirical evidence on the constancy of the ratio of productivity growth to output growth. As a theoretical underpinning he used a neoclassical growth model. The main purpose of this paper is to emphasize that in this model the ratio is constant only in the steady state. If Verdoorn's underpinning of his law is to be correct, the steady-state assumption should be empirically tested. Some available evidence for Verdoorn's sample appears to throw doubt upon this assumption.     

地理与服务业-内需是否会使城市体系分散化?

本文利用中国城市面板数据,考察了到大港口和区域性核心大城市的距离对第三产业劳动生产率的影响。我们发现,第三产业劳动生产率和到大港口的距离之间呈现出三次型的"∽"曲线关系,随着离大港口越来越远,第三产业劳动生产率下降、上升再下降。相比之下,第二产业劳动生产率和到大港口的距离之间也存在三次曲线关系,但是没有第二波峰,说明第二产业的集聚力比第三产业相对更强,但离散力相对更弱。同时,我们也发现,区域性的大城市对第三产业劳动生产率的影响比对第二产业的影响更加明显。本文的含义是,向沿海和大城市周边的空间集聚对于服务业发展非常重要,服务业作为内需增长的源泉并不会使城市体系分散化。     

Nicholas Kaldor on Adam Smith and Allyn Young

ABSTRACT

Nicholas Kaldor was much influenced by the Smith-Young view of increasing returns. The objective of this paper is to critically examine Kaldor’s interpretation of Smith and Young. In particular, five questions are addressed: (1) Does Smith’s Wealth of Nations have nothing much to contribute in terms of disequilibrium theory or increasing returns after the middle of chapter four? (2) Did Smith and Young have a sectoral view of increasing returns in the sense that they saw increasing returns being confined to manufacturing only? (3) Does the Youngian growth mechanism need to be supplemented with Keynesian aggregate demand so that growth does not fizzle out? (4) What are the important policy differences between Kaldor and the Smith-Young analysis of increasing returns? (5) Finally, what explains Kaldor’s interventionist bent of mind and his dirigiste approach to policy making?     

What remains of the growth controversy ∗

Nobel laureate R.M. Solow (1992) reflected that, ‘The Kaldor–Kalecki–Robinson–pasinetti line made life harder for itself by being part of a wholesale attack on mainstream economics. Anyway, it was not ever able to muster a body of serious applied work’. This article considers the accuracy of an assessment like Solow's of the sucess of the growth theorys that economists have proposed as alternatives to neoclassical growth theory. The article, which takes an historical perspective, focuses on Kaldor's growth theory.     

The service paradox and endogenous economic growth

“Stagnant services” [Baumol, W.J., Blackman, S.A.B., Wolff, E.N., 1989. Productivity and American Leadership. MIT Press, Cambridge (Mass.)] are characterised by low productivity growth and rising prices, but also, and paradoxically, by output growth proportional to the rest of the economy, and hence by an expanding employment share, with a negative effect on aggregate productivity growth. This paper considers that many of these services, inclusive of education, health and cultural services, contribute to human capital formation, thus enhancing growth. This effect is distinguished according to whether it is a side-effect of spending on services or an intentional investment by households, as in Lucas’ model [Lucas, R.E., 1988. On the mechanics of economic development. Journal of Monetary Economics 22, 3–42.] Preferences for services are assumed to rise with income. The main result is that the productivity of stagnant services and their quality displayed in raising human capital play a central role in opposing the negative Baumol effect on growth, and in reinforcing the explanation of the paradox.     

Real wages,productivity and economic growth in the G7, 1960–2002

Abstract

This paper investigates empirical real wage and productivity dynamics in the G7 countries using annual data for 1960–2002. The findings suggest that the level of labor productivity is positively related to GDP growth in all countries, and real wages are positively related to growth in some of them. The results tend to confirm the ‘profit paradox’. This postulates a positive relationship between economic growth and the aggregate profit share, and suggests that the frequent support of business interests for deflationary economic policies is a puzzle.     

可持续发展背景下中国资源型城市的双重结构转型

在我国可持续发展的战略背景下,资源型城市经历了由资源型部门向非资源型部门、由国有部门向非国有部门的双重结构转型过程。以全国24个省份的110个资源型城市作为样本,实证分析了双重结构转型与我国资源型城市经济发展的关系,得出长期过程中国有部门和资源型部门占比呈现先上升后下降的倒“U”型趋势的结论,并分析了金融抑制和市场垄断程度这两种外部约束因素对双重转型过程的影响。研究发现,金融抑制主要通过间接效应扭曲了资源配置,进而影响了体制转型的过程,减缓了国有经济占比下降的速度;而资源型城市的市场垄断性越强,其发展转型就越难以进行。根据以上结论为我国资源型城市的结构转型和可持续发展提出了政策建议。     

The Dutch productivity slowdown: the culprit at last?

Two aspects of the recent performance of the Dutch economy (1982–2001) have attracted wide international attention: (1) rapid employment growth and (2) a significant slowdown in labour productivity growth. This paper argues that the shift from a high-productivity, low-employment towards a low-productivity, high-employment growth path constitutes a structural change set off by the policy of low wage growth launched in 1982. Various theoretical perspectives—including neo-classical substitution, induced technological change, vintage and the Verdoorn Law—point to channels through which wage growth restraint may hold back labour productivity growth. Our growth accounting analysis—based on these perspectives—suggests that a substantial part of the Dutch labour productivity growth slowdown can be attributed to the wage growth slowdown.     

中国城市绿色全要素生产率测度研究

基于考虑"能源消耗"与"环境污染"的超效率SBM模型,采用全局参比的Globe-Malmquist-Luenberger(GML)指数测算中国283个城市的绿色全要素生产率(GTFP)。研究发现:(1)城市绿色全要素生产率、技术效率和技术进步分别以年均3.5%、1.2%和2.3%的速度增长,GTFP的增长动力主要来源于技术进步,而作为"绿色软技术"的技术效率贡献相对不足;(2)三大区域绿色全要素生产率平均增幅东部>中部>西部,技术进步差异是GTFP区域差距形成的主要原因,不同时期区域发展战略和环境政策在城市绿色转型中的作用存在异质性;(3)超大及特大城市、行政等级较高的城市绿色全要素生产率增长具有领先优势,且研究期内不同层级城市GTFP差距呈现先缩小后扩大的趋势。     

Convergence: International comparisons based on a simultaneous equation model with regional effects

A structural model incorporating regional effects is fitted to cross-sectional data for 60 countries. The model integrates various strands in the literature, including the dynamic Verdoorn Law linking productivity growth to output growth, and relationships between educational attainment, trade and innovativeness. Most notably, the structural model supports the thesis that a country's innovativeness and, consequently, capital stock growth, depend on the level of technology in the 'surrounding' region.The approach adopted is set within the context of the theoretical and empirical analysis of increasing returns and cumulative causation. However, the resulting parameter estimates lead to a reduced form that implies convergence to an equilibrium rather than divergent productivity levels. The equilibrium productivity level ratios (vis-à-vis the USA) indicate that countries are converging on different levels, although a group does attain the USA productivity level.     

Urban Structure and Growth

Most economic activity occurs in cities. This creates a tension between local increasing returns, implied by the existence of cities, and aggregate constant returns, implied by balanced growth. To address this tension, we develop a general equilibrium theory of economic growth in an urban environment. In our theory, variation in the urban structure through the growth, birth, and death of cities is the margin that eliminates local increasing returns to yield constant returns to scale in the aggregate. We show that, consistent with the data, the theory produces a city size distribution that is well approximated by Zipf's law, but that also displays the observed systematic underrepresentation of both very small and very large cities. Using our model, we show that the dispersion of city sizes is consistent with the dispersion of productivity shocks found in the data.     

科技与金融结合对全要素生产率的影响——基于“促进科技和金融结合试点”准自然实验的经验证据

将科技和金融结合试点政策视为一项准自然实验,基于2005—2017年中国283个城市数据,采用双重差分法评估科技和金融结合试点政策对全要素生产率的影响。结果发现：①科技和金融结合试点政策对全要素生产率具有正向影响且通过了显著性水平检验;②科技和金融结合试点政策主要通过提高城市创新水平和融资能力等途径促进全要素生产率增长,创新水平、融资能力在科技和金融结合试点与全要素生产率间起中介作用;③科技和金融结合试点政策对全要素生产率的影响存在异质性,经济发展水平较高、金融发展水平较高的城市,科技和金融结合试点政策对全要素生产率的影响更大。由此建议,加大金融资源支持力度,缓解企业融资约束,加强政府对创新的支持。     

要素禀赋及中国农业劳动生产率的地区差异

Since the introduction of the household responsibility system, China’s agricultural economy has been growing with the enlargement of regional labor productivity disparity. Based on the traditional decomposition technique for the research of agricultural economic growth, this paper uses the Blinder-Oaxaca approach to decompose the regional disparity of agricultural labor productivity, and gives corresponding reasons. It is shown that, factor endowment disparity is an important reason which affects the agricultural labor productivity of different regions in China; it explains 38.26% of the agricultural labor productivity disparity between the Eastern and the Western China, and 71.56% between the Eastern and the Central China. The rest part of the agricultural labor productivity disparity is mainly caused by the output elasticities of the input factors.     

中国服务业发展悖论——基于“两波”发展模式的研究

本文借鉴最新文献对服务业发展规律的测度方法,用中国1952—2010年的地区面板数据对我国服务业比重变化的长期规律和阶段性特征进行了测度,结果认为:宏观国家层面上,我国服务业比重的变化确实有悖于世界经济整体服务化的趋势;但在地区层面上,我国服务业比重与人均GDP的关系基本符合"服务业比重随经济发展不断上升"的普遍规律,所谓经济服务化的"中国悖论"在地区层面上并不存在;对服务业发展的阶段性特征和地区差异进行分析发现,我国大部分地区仍然处于以传统服务业为主的第一波发展阶段,只有少数地区进入了以现代服务业发展为主导的第二波。文章最后对我国服务业发展规律的成因进行了一般分析和实证检验。     

PRODUCTIVITY, WORKPLACE PERFORMANCE AND ICT: INDUSTRY AND FIRM-LEVEL EVIDENCE FOR EUROPE AND THE US

This paper considers the contribution of information and communications technology (ICT), to international productivity performance. It first uses an international industry data set and a growth accounting framework, to show that ICT has typically had a lower impact on productivity in Europe than in the US, although there is considerable variation within Europe. The paper also analyses the European situation in greater depth by examining micro‐economic data from Germany, Italy and the UK. While direct comparisons between the national findings are difficult, the results suggest that the UK experience with ICT has been closer to the US than other European countries.     

From family security to the welfare state: Path dependency of social security on the difference in legal origins

We provide a new framework to analyze law and public finance from the perspective of difference in legal origins. The size of the welfare system differs from country to country. The security net provided by the family and other informal institutions also varies. Our two-sector model links these phenomena. We consider two cases of security. The first considers security achieved through intra-household resource redistribution in the traditional sector. The second case considers the welfare state, which taxes the modern sector. Switching from intense family security to an extensive welfare state model enhances growth because state taxation on the modern sector harnesses the potential productivity of the entire economy. In contrast, countries with low levels of family security should transition to a small welfare state model to sustain growth. This finding explains the different trends of welfare benefits in civil law and common law countries. The different sizes of the welfare state have their origins in family law, which differently stipulates family security between civil law and common law countries.     

Are the Kaldor–Verdoorn Laws Applicable in the Newly Industrializing Countries?

The Kaldor–Verdoorn "laws," the focus of this work, are a set of stylized facts which attempt to describe growth in an economy. This paper tests these stylized facts using macroeconomic data from newly industrializing countries. Results show that high rates of growth of manufacturing do not translate to high productivity rates in Singapore, Indonesia, Thailand, and Mauritius, but they do so in South Korea. A negative relation exists for Malaysia. This work questions the operation of Kaldor's laws in the context of globalization and suggests a revision of the laws.