Accounting for Growth with New Inputs

30 Pages Posted: 27 Dec 2006

See all articles by Robert C. Feenstra

Robert C. Feenstra

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

James R. Markusen

University of Colorado at Boulder - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: July 1992

Abstract

In this paper we examine how to account for growth when new inputs are being created. In particular, we obtain a decomposition of growth into that due to a higher quantity of existing inputs, and that due to a greater range of inputs. This decomposition is first obtained for a single firm, with a CES production function. We then generalize to the GNP function of an economy. and again show how a decomposition of growth in GNP can be obtained. An example is presented of a two-sector economy, where new inputs are endogenously created each period, and a simple aggregate production function exists. Data for this economy are simulated, and the GNP function is estimated using various different measures of the factor inputs.

Suggested Citation

Feenstra, Robert C. and Markusen, James R., Accounting for Growth with New Inputs (July 1992). NBER Working Paper No. w4114. Available at SSRN: https://ssrn.com/abstract=476194

Robert C. Feenstra (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
916-752-9240 (Phone)
916-752-9382 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

James R. Markusen

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-0748 (Phone)
303-492-8960 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
35
Abstract Views
517
PlumX Metrics