Growth Accounting in Items of Turbulence and Death: Efficiency, Technology, Capital Accumulation and Human Capital 1929-1950

40 Pages Posted: 25 Jul 2007

See all articles by Kerstin Enflo

Kerstin Enflo

Lund University; Universitat Pompeu Fabra

Jörg Baten

University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: March 2007

Abstract

We employ a non-parametrical approach to growth accounting (Data Envelopment Analysis, DEA) to disentangle the proximate sources of labour productivity growth in 41 nations between 1929 and 1950 by decomposing productivity growth into four components: technological change, efficiency catch-up (movements towards the production frontier), capital accumulation and human capital accumulation. We show that efficiency catch-up generally explains productivity growth, whereas technological change and factor accumulation were limited and distorted by the effects of war. War clearly hampered efficiency. Moreover, an unbalanced ratio of human capital to physical capital (a gap to the technological leader) was crucial for efficiency catching-up.

Keywords: DEA, growth accounting, productivity, interwar period

JEL Classification: N10, N40, O47

Suggested Citation

Enflo, Kerstin and Baten, Jorg, Growth Accounting in Items of Turbulence and Death: Efficiency, Technology, Capital Accumulation and Human Capital 1929-1950 (March 2007). Available at SSRN: https://ssrn.com/abstract=1002908 or http://dx.doi.org/10.2139/ssrn.1002908

Kerstin Enflo

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Universitat Pompeu Fabra

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

Jorg Baten (Contact Author)

University of Tuebingen - Department of Economics ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany
+49 7071 2972985 (Phone)
+49 7071 295119 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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