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Intangible Capital and International Income Differences

22 Pages Posted: 20 Nov 2007 Last revised: 3 Oct 2013

Aamir Rafique Hashmi

University of Calgary - Department of Economics; University of Calgary

Date Written: June 17, 2008

Abstract

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.

Keywords: International Income Differences, Intangible Capital

JEL Classification: O33, O41, O47

Suggested Citation

Hashmi, Aamir Rafique, Intangible Capital and International Income Differences (June 17, 2008). Macroeconomic Dynamics, Vol. 17, No. 3, 2013. Available at SSRN: https://ssrn.com/abstract=1029250 or http://dx.doi.org/10.2139/ssrn.1029250

Aamir Rafique Hashmi (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

University of Calgary ( email )

2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada

HOME PAGE: http://aamirhashmi.com

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