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  3. American Economic Journal: Macroeconomics
  4. January 2010
  5. Development Accounting

Development Accounting

  • Chang-Tai Hsieh
  • Peter J. Klenow
American Economic Journal: Macroeconomics
vol. 2, no. 1, January 2010
(pp. 207-23)
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Abstract

Researchers have made much progress in the past 25 years in accounting for the proximate determinants of income levels: physical capital, human capital, and Total Factor Productivity (TFP). But we still know little about why these factors vary. We argue that TFP exerts a powerful influence on output not only directly, but also indirectly, through its effect on physical and human capital accumulation. We discuss why TFP varies across countries, highlighting misallocation of inputs across firms and industries as a key determinant. (JEL E22, E23, F21, F35, O10, O40)

Citation

Hsieh, Chang-Tai, and Peter J. Klenow. 2010. "Development Accounting." American Economic Journal: Macroeconomics, 2 (1): 207-23. DOI: 10.1257/mac.2.1.207

Additional Materials

JEL Classification

  • E22 Capital; Investment; Capacity
  • E23 Macroeconomics: Production
  • F21 International Investment; Long-term Capital Movements
  • F35 Foreign Aid
  • O10 Economic Development: General
  • O40 Economic Growth and Aggregate Productivity: General
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