Engines of Growth in the U.S. Economy

CentER Working Paper No. 78

23 Pages Posted: 15 Nov 2000

See all articles by Thijs ten Raa

Thijs ten Raa

Tilburg University - Center for Economic Research (CentER)

Edward N. Wolff

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER); Bard College - Levy Economics Institute

Date Written: September 2000

Abstract

There is good reason to believe that R&D influences on TFP growth in other sectors are indirect. For R&D to spill over, it must first be successful in the home sector. Indeed, observed spillovers conform better to TFP growth than to R&D in the upstream sectors. Sectoral TFP growth rates are thus interrelated. Solving the intersectoral TFP equation resolves overall TFP growth into sources of growth. The solution essentially eliminates the spillovers and amounts to a novel decomposition of TFP growth. The top 10 sectors are designated "engines of growth" led by computers and office machinery. The results are contrasted to the standard, Domar decomposition of TFP growth.

JEL Codes: O30, O41, O51, L86, D57

JEL Classification: O30, O41, O51, L86, D57

Suggested Citation

ten Raa, Thijs and Wolff, Edward N., Engines of Growth in the U.S. Economy (September 2000). CentER Working Paper No. 78, Available at SSRN: https://ssrn.com/abstract=244662 or http://dx.doi.org/10.2139/ssrn.244662

Thijs Ten Raa (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

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Edward N. Wolff

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Bard College - Levy Economics Institute

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