We propose a theory where capital market imperfections are at the origin of cross-country TFP differences. In our theory entrepreneurs have private information about the multifactor productivity of their technology. We study how the contracting environment, as described by the ability to enforce...

Detailed macroeconomic data to accompany the article in the Review of Economic Dynamics

This article presents a group of exercises of level and growth decomposition of output per worker using cross-country data from 1960 to 2000. Its shown that at least until 1975 factors of production ( capital and education) were the main cause of output dispersion and that productivity variance...

We ask whether the three-sector neoclassical growth model can account for the large cross-country differences in the levels of per-capita income, in the stocks of physical and human capital, and in the relative prices of capital. We use a version in which one sector produces services, a second...