This paper studies the productivity impact of heterogeneous capital inputs of selected EU-15 member countries and of the U.S. at the macroeconomic level. The stochastic possibility frontiers approach of Battese and Coelli (1992) applied here is used to identify neutralities or nonneutralities...

An establishment can improve its productivity by hiring workers from more productive establishments. Then, how important is worker reallocation for aggregate productivity growth? To study this question, I develop a general equilibrium model where knowledge transmits as workers reallocate from...

We develop a measure of static misallocation that separates uncertainty from misallocation generated by tax-like distortions. In the Finnish firm-level data, uncertainty accounts for the majority of ex post misallocation and explains a strong decreasing age-dependent trend in it. To understand...

We provide the first direct estimates of distribution expenses incurred by manufacturing plants and assess their importance for aggregate output. Using a novel measure from the Indian Annual Survey of Industries, we document three key facts: (1) distribution expenses are large – they amount to...

In the wake of the financial crisis output fell dramatically while inflation remained above its target and productivity collapsed relative to its previous trend. The fall in productivity relative to trend was particularly pronounced within the service sector, and then most particularly in...

We construct a coherent theory of extreme macro instability, an important macro phenomenon most recently experienced in the United States in 2008-09. The model is then used to identify significant policymaking lessons from the Great Recession. The analysis is part of the ongoing GEM Project that...

The article provides multifaceted evidence on the shape of the aggregate country-level production function, derived from the World Technology Frontier, estimated on the basis of annual data on inputs and output in 19 highly developed OECD countries in the period 1970–2004. A comparison of its...

This paper employs a nonparametric approach to investigate the sources of growth in labor productivity for 77 countries and to decompose it in the following three components: (1) total factor productivity; (2) capital deepening; and (3) technological capabilities accumulation (a proxy of the...

We generalize the normalized Constant Elasticity of Substitution (CES) production function by allowing the elasticity of substitution to vary isoelastically with (i) relative factor shares, (ii) marginal rates of substitution, (iii) capital-labor ratios, or (iv) capital-output ratios. Ensuing...

We show theoretically and empirically that standard methods give downward biased estimates of productivity growth if technical change is factor-biased. We show how to correct for this bias and construct more reliable measures of the productivity gains from technical progress. We consider two...