I formulate and estimate a model of externalities within countries
and technological interdependence across countries. I find that external
returns to scale to physical capital within countries are 8 percent; that
a 10 percent increase of total factor productivity of a country's neighbors
raises its total factor productivity by 6 percent; and that a 2 percent
annual growth rate of labor productivity can be explained as an endogenous
response to an exogenous 0.2 percent annual growth rate of total ...
I formulate and estimate a model of externalities within countries
and technological interdependence across countries. I find that external
returns to scale to physical capital within countries are 8 percent; that
a 10 percent increase of total factor productivity of a country's neighbors
raises its total factor productivity by 6 percent; and that a 2 percent
annual growth rate of labor productivity can be explained as an endogenous
response to an exogenous 0.2 percent annual growth rate of total factor
productivity in the steady--state.
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