Title: Distortions in the investment goods sector and productivity decline
Abstract: We study the impact of distortions in the investment goods sector on aggregate total factor productivity (TFP). We develop a two-sector neo-classical growth model in which TFP in the capital goods sector relative to TFP in the consumption sector is inversely related to the price of investment relative to consumption, so that we use relative prices to measure TFP in the investment goods sector. The model is calibrated to Brazil and we nd that distortions in the investment goods sector may explain most of the decline in Brazilian TFP relative to the United States since the mid-1970s.
Publication Year: 2014
Publication Date: 2014-08-14
Language: en
Type: preprint
Access and Citation
Cited By Count: 2
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot