NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Growth Accounting with Misallocation: Or, Doing Less with More in Singapore

John Fernald, Brent Neiman

NBER Working Paper No. 16043
Issued in June 2010
NBER Program(s):   EFG   IFM   PR

We derive aggregate growth-accounting implications for a two-sector economy with heterogeneous capital subsidies and monopoly power. In this economy, measures of total factor productivity (TFP) growth in terms of quantities (the primal) and real factor prices (the dual) can diverge from each other as well as from true technology growth. These distortions potentially give rise to dynamic reallocation effects that imply that change in technology needs to be measured from the bottom up rather than the top down. We show an example, for Singapore, of how incomplete data can be used to obtain estimates of aggregate and sectoral technology growth as well as reallocation effects. We also apply our framework to reconcile divergent TFP estimates in Singapore and to resolve other empirical puzzles regarding Asian development.

download in pdf format
   (417 K)

email paper

This paper is available as PDF (417 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16043

Published: John Fernald & Brent Neiman, 2011. "Growth Accounting with Misallocation: Or, Doing Less with More in Singapore," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(2), pages 29-74, April. citation courtesy of

Users who downloaded this paper also downloaded these:
Jones w16742 Misallocation, Economic Growth, and Input-Output Economics
Hulten w15341 Growth Accounting
Bosworth and Collins w12943 Accounting for Growth: Comparing China and India
Collard-Wexler, Asker, and De Loecker w17175 Productivity Volatility and the Misallocation of Resources in Developing Economies
Midrigan and Xu w15647 Finance and Misallocation: Evidence from Plant-level Data
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us