Intangible Capital and International Income Differences
Aamir Rafique Hashmi
National University of Singapore
June 17, 2008
I add intangible capital to a variant of the neoclassical growth model and study the implications for cross-country income differences. I calibrate the parameters associated with intangible capital by using new estimates of investment in intangibles by Corrado et al. (2006). When intangible capital is added to the model, the TFP elasticity of output increases from 2.14 to 2.64. This finding implies that the addition of intangible capital increases the ability of the neoclassical growth model to explain international income differences by more than a factor of two.
Number of Pages in PDF File: 22
Keywords: International Income Differences, Intangible Capital
JEL Classification: O33, O41, O47working papers series
Date posted: November 20, 2007 ; Last revised: February 28, 2012
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