Growth and the Kaldor Facts

18 Pages Posted: 6 Dec 2019 Last revised: 6 Mar 2020

See all articles by Berthold Herrendorf

Berthold Herrendorf

Arizona State University (ASU) - Economics Department

Richard Rogerson

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER); Princeton University - Princeton School of Public and International Affairs

Akos Valentinyi

University of Manchester; CERS-HAS; CEPR

Date Written: 2019

Abstract

We revisit the Kaldor growth facts for the United States and the United Kingdom during the postwar period. We find that while overall the original Kaldor facts continue to hold, deviations occurred along several dimensions: Instead of staying constant, the growth rates of real GDP per worker and of real capital per worker have slowed down in the United States and the United Kingdom since the 1970s, the capital-to-output ratio has increased in the United Kingdom, and the share of income paid to labor has decreased in the United States since 1990. We discuss how to calculate the Kaldor facts in multi-sector growth models and establish that a slowdown in GDP-per-worker growth naturally results from secular changes in relative prices.

JEL Classification: O41, O47

Suggested Citation

Herrendorf, Berthold and Rogerson, Richard and Valentinyi, Akos, Growth and the Kaldor Facts (2019). Review, Vol. 101, Issue 4, pp. 259-76, 2019, Available at SSRN: https://ssrn.com/abstract=3494167 or http://dx.doi.org/10.20955/r.101.259-76

Berthold Herrendorf (Contact Author)

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

Richard Rogerson

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States
480-727-6671 (Phone)
602-965-0748 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Princeton University - Princeton School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Akos Valentinyi

University of Manchester ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

CERS-HAS ( email )

Budaorsi ut 45
Budapest, 1112
Hungary

CEPR

London
United Kingdom

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