4 / RT / 03 August 2003 CENTRAL BANK AND FINANCIAL SERVICES AUTHORITY OF IRELAND
نویسنده
چکیده
An important theme in modern research on productivity has been that technological progress may be embodied in capital in the sense that traditional measures of TFP growth reflect unmeasured improvements in the quality of capital inputs as well as pure disembodied technological progress. It is commonly believed that an implication of this embodiment hypothesis is that there should be a negative relationship between measured TFP and the age of the measured capital stock. This paper presents empirical evidence which suggests that an increase in the age of the capital stock is actually associated with higher TFP. This surprising result may be due to the presence of a mismeasurement normally overlooked in this literature: With mis-measured improvements in capital quality, the usual depreciation rates used to construct empirical capital stocks are incorrect for growth accounting. This effect dominates the usual average age effect.
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The views expressed in this paper are the personal responsibility of the author and are not necessarily held either by the Central Bank and Financial Services Authority of Ireland or by the ESCB. The author would like to thank John Frain, Maurice McGuire and participants at an internal seminar in the Central Bank for helpful comments on earlier drafts of this paper. All remaining errors and omi...
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