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I examine whether competition from domestic industry rivals affects firms' proclivity to undertake foreign direct investment (FDI) and their country location choices. I find that competition affects foreign production decisions and the geography of international investments. While firms enduring stiffer competition are significantly less likely to undertake FDI, this effect is heterogeneous across firms. Competition deters FDI more strongly when costs are heavier, whereas it has weaker effects when efficiency is higher, growth opportunities are valuable, and cash reserves are higher. FDI location models suggest that when going abroad, firms facing stronger competition are more likely to pursue economies of productivity and taxation. [ABSTRACT FROM AUTHOR]

Survey evidence tells us that stock prices reflect the risks investors associate with long-run technological change. However, there is a shortage of models that can rationalize long-run risks. Unlike the previous literature assuming a fixed number of products, our model allows for new product varieties that appear in the form of new firms which face entry costs and delay in the entry process. The fixed variety model has a significant limitation in translating macroeconomic volatility into asset return volatility. Our model with growing varieties induces endogenous low-frequency fluctuations in productivity driving large, persistent variations in consumption growth and asset prices. It also changes the valuation of assets through the increase in the volatility of the pricing kernel (with a positive long-run component) and leads to higher excess returns. Our model is motivated by a simple recursively identified VAR model containing quarterly US data 1992Q3-2018Q4 with the following list of variables: total factor productivity, output, a measure of firm entry, and the excess return on stocks. [ABSTRACT FROM AUTHOR]

We study the transmission mechanism of a Green QE, defined as a policy that tilts the central bank's balance sheet toward green bonds, that is bonds issued by non-polluting firms. We merge a DSGE framework with an environmental model, in which CO2 emissions increase the stock of atmospheric carbon, which in turn decreases total factor productivity. Imperfect substitutability between green and brown bonds is a necessary condition for the effectiveness of Green QE. However, even under this assumption, the effect of Green QE in reducing emissions is negligible and in some cases close to nil. [ABSTRACT FROM AUTHOR]

This paper examines the effect of frontier academic research on technological development and the way institutional quality influences this impact. Using a dataset that covers 18 OECD countries over the 2003–2017 period, we find that frontier academic research exerts an important influence on total factor productivity. First, frontier academic research induces technological change by directly enhancing production processes and management methods. Second, frontier academic research stimulates industrial innovations, which in turn improves productivity. Regarding the moderating effect of institutional variables on these relationships, we find that positive moderation only exists for some, not all, of the institutional variables. In that case, a higher level of these variables is found to strengthen the way countries reap benefits from frontier academic research and industrial innovation. However, the moderation of institutions is much less clear with the process that turns frontier academic research into industrial innovations. [ABSTRACT FROM AUTHOR]

We identify a positive causal effect of healthy working environments on corporate innovation, using the staggered passage of U.S. state-level laws that ban smoking in workplaces. We find a significant increase in patents and patent citations for firms headquartered in states that have adopted such laws relative to firms headquartered in states without such laws. The increase is more pronounced for firms in states with stronger enforcement of such laws and in states with weaker preexisting tobacco controls. We present suggestive evidence that smoke-free laws affect innovation by improving inventor health and productivity and by attracting more productive inventors. [ABSTRACT FROM AUTHOR]

Since at least the mid-2000s, many advanced economies have experienced low productivity growth. This development is often related to declining productivity gains at the technology frontier, which is largely determined by the US. We challenge this explanation by studying the effects of US technology shocks on productivity levels in advanced economies. We find positive but small spillovers of US technology shocks. For many countries, the elasticity of their productivity with respect to a 1% increase in the US technology level is significantly lower than 1. Thus, the recent US productivity slowdown must have had a limited effect on productivity developments in advanced economies. Nevertheless, after 5 years, the degree of productivity spillovers varies across countries. Therefore, we analyze the role of institutions in shaping these results. Our findings suggest that isolated institutional characteristics are not able to explain the observed various spillover degrees. [ABSTRACT FROM AUTHOR]

Earlier research largely ignored the effects of climate change on the growth of agricultural total factor productivity (TFP) in Africa. This study shows how climate inputs impact TFP growth in addition to other productivity growth indicators and metrics, as well as how they can impact overall input efficiency as productivity drivers. We use a panel of 42 African nations from 1999 to 2019 and a nonparametric data envelopment analysis-Malmquist technique. The non-parametric analysis revealed that the average growth rate of the non-climate-induced TFP estimates was 1.9%, while the average growth rate of the climate-induced TFP estimates was 2.4%. Accounting for temperature and precipitation separately, TFP grew by 2.3% on average. This growth rate (2.3%) is slightly less than the combined effect of temperature and precipitation (2.4%) but higher than the typical TFP growth rate (1.9%) that ignores climate variables, indicating that TFP growth in African agriculture risks being underestimated when climate inputs are ignored. We also find the distribution of the climate effects to vary across regions. In northern Africa, for example, the temperature-induced TFP growth rates were negative due to rising temperature in the region. Evidence from the decomposed TFP estimates indicates that climate variables also influence productivity determinants. However, technology improvement is fundamental to mitigating the effects of extreme weather inputs on TFP growth in Africa's agriculture. As a result, a few policy suggestions are provided to help policymakers deal with the effects of climate change on TFP growth in Africa's agriculture and ensure food security. The study advocated for a reevaluation of the climate-agriculture effect in order to fully comprehend the role of climate factors and their contributions to agricultural TFP growth in Africa. [ABSTRACT FROM AUTHOR]

Traditionally identified monetary shocks in a structural vector autoregression (SVAR) model typically result in long-lasting effects on output and total factor productivity (TFP). In this paper, I argue that the typical monetary shock has been confounded with the news shock about future technology. I propose and implement a novel SVAR approach that effectively "cleans" the technology component from the traditional Cholesky monetary shock. With the new identification, I find that a monetary shock exerts smaller and less persistent effects on output and the level of measured TFP than a traditionally identified monetary shock. Finally, I show that the SVAR impulse responses can be replicated by augmenting the standard New Keynesian model with a time-varying inflation target and a non-Ricardian fiscal policy regime. [ABSTRACT FROM AUTHOR]

Using unique U.S. Census data sets, we analyze how entrepreneurial firms’ product market characteristics affect their choice between going public, being acquired, or remaining private. Size, total factor productivity (TFP), sales growth, capital expenditure, market share, access to private funding, and human capital intensiveness significantly increase a private firm’s likelihood of an initial public offering (IPO) relative to an acquisition. Firms in industries with less information asymmetry and higher stock liquidity are more likely to choose an IPO over an acquisition. While TFP peaks around either form of exit, the rate of increase in TFP prior to acquisitions and the subsequent decrease is smaller than that around IPOs. [ABSTRACT FROM PUBLISHER]

Imperfections in the credit market can hamper the flow of factors from less productive to more productive firms and result in a lower aggregate total factor productivity (TFP). Depth of such misallocation will depend on per capita income, the level of imperfections in the credit market, and the distribution of entrepreneurial productivity. Under some parameter configurations, we find that per capita income and TFP may affect each other so that an economic boom may cause higher resource misallocation, lower TFP, and economic recession. At the same time, an economic recession may have a "cleansing effect" on TFP leading to a lower resource misallocation, higher TFP, and economic boom. In other words, economic success may breed the failure and the failure can become a precondition for success so that the boom-bust cycles in resource misallocation, TFP, and per capita income may become endogenous. [ABSTRACT FROM AUTHOR]

Recently, Penn World Tables include new data that enable calculation of total factor productivity in addition to output for a large set of countries. We use these new data to examine convergence and divergence across countries by applying a new approach, which differentiates between the dynamics of output and of productivity. Our empirical results lead to two main new contributions to the literature. The first is on the interpretation of "β-convergence" in "growth regressions." It means that output per worker in each country converges to productivity but does not imply convergence across countries, since productivity tends to diverge from the global frontier. The second contribution is to the literature, which finds that income gaps across countries are due mainly to differential technology adoption. This paper shows that the gaps in technology are not only large but keep growing over time. [ABSTRACT FROM AUTHOR]

In this article, we discuss whether there was a single Latin American pattern of agricultural growth between 1950 and 2008. We analyse the sources of growth of agricultural production and productivity in ten Latin American countries. Our results show that the differences between these countries are too large to establish a single pattern for this region. However, certain common trends may be observed, such as the growing importance of labour productivity as a component of agricultural production growth and the increasing relevance of total factor productivity as a component of agricultural labour productivity growth. [ABSTRACT FROM AUTHOR]

This article discusses the arms exports of Škoda Works (one of Czechoslovakia's largest arms producers and exporters) during the 1930s and evaluates the export situation within the context of total Czechoslovak arms exports. At the beginning of the 1930s, economic crisis negatively affected the production and export of arms. However, the political climate facilitated the brisk recovery of this sector and the resumption of foreign trade in war materials. Škoda Works was successful in foreign markets, particularly in the sale of artillery materials and military vehicles. In addition to economic factors, trade was also influenced by political interests. This is also shown by the examples of arms exports to Romania and Yugoslavia, which were part of the Little Entente. [ABSTRACT FROM AUTHOR]

Has the golden age of U.S. agricultural productivity growth ended? We analyze the detailed patterns of productivity growth spanning a century of profound changes in American agriculture. We document a substantial slowing of U.S. farm productivity growth, following a late mid-century surge—20 years after the surge and slowdown in U.S. industrial productivity growth. We posit and empirically probe three related explanations for this farm productivity surge-slowdown: the time path of agricultural R&D-driven knowledge stocks; a big wave of technological progress associated with great clusters of inventions; and dynamic aspects of the structural transformation of agriculture, largely completed by 1980. [ABSTRACT FROM AUTHOR]

Growth in total factor productivity (TFP) in the USA has slowed down significantly since the mid-2000s, reminiscent of the productivity slowdown of the 1970s. This paper investigates the implications of a productivity slowdown on macroeconomic variables using a standard real business cycle (RBC) model, extended with regime-switching in trend productivity growth and Bayesian learning regarding the growth regime. I estimate the Markov-switching parameters using US data and maximum-likelihood methods, and compute the model solution using global projection methods. Simulations reveal that, while adding a regime-switching component to the standard RBC setup increases the volatility in the system, further incorporating incomplete information and learning significantly dampens this effect. The dampening is mainly due to the responses of investment and labor in response to a switch in the trend component of TFP growth, which are weaker in the incomplete information case as agents mistakenly place some probability that the observed decline in TFP growth is due to the transient component and not due to a regime switch. The model offers an objective way to infer slowdowns in trend productivity, and suggests that macroeconomic aggregates in the USA are currently close to their potential levels given observed productivity, while counterfactual simulations indicate that the cost of the productivity slowdown to US welfare has been significant. [ABSTRACT FROM AUTHOR]

This paper analyzes the effects of corporate tax liability on firm-level total factor productivity (TFP) as the key driver of economic performance. This is a new dimension in the UK productivity puzzle that has not attracted attention so far. We use 6559 manufacturing firms over 2004–2011 to investigate whether higher levels of corporate tax affect the productivity catch-up process by reducing after-tax earnings that could alternatively be used for productivity-enhancing investment, particularly focusing on R&D- and export-intensive firms. Our key results are summarized as follows: first, higher levels of corporate taxation impact adversely on TFP and this finding is robust to different tax measures and insensitive to endogeneity bias; second, as R&D- and export-intensive firms tend to have relatively higher TFP growth, higher levels of tax liability as a share of earnings before interest and taxes decelerate TFP growth of these firms. [ABSTRACT FROM AUTHOR]

Understanding the causes of the Industrial Revolution, namely the process of transition from a Malthusian equilibrium to modern economic growth, has been the subject of passionate debate. This paper contributes to insights into the process of industrialization and the demographic transition that followed. We present a model that proposes a mechanism behind the claim that landed elites had strong incentives to block education reforms. By applying the theory of interest groups to landownership, landowners could delay education. However, they could not prevent its introduction indefinitely since gains for the landed elites derived from education would at some moment surpass the costs associated with them. We also sustain that improvements in agricultural productivity prior to the Industrial Revolution may have induced a positive impact on the landowners' decision to educate the population, which led to an earlier introduction of education reforms. The conclusions fit the patterns of the late boom of industrialization and demographic transition and help explain why some countries (e.g., Britain and The Netherlands) had accelerated education reforms and a faster process of industrialization than most continental countries. A theoretical model is presented, and numerical simulations are exhibited to illustrate our claims. [ABSTRACT FROM AUTHOR]

This article explores how workers' diets and meal services at factory canteens became the nucleus of labour politics in Republican Shanghai, China's industrial heartland. At the heart of Chinese labour politics was a demand for the improvement of workers' diets, particularly for adequate meal service, which was to be provided by management at a reasonable price—if not for free—at the workplace. The purpose of this article is not only to draw attention to a lacuna in Chinese labour history, but also to shed new light on the agency of workers in their labour disputes from the perspective of food history. No other issue provided a better opportunity to unite workers, labour activists, and so-called scabs than the issue of food. In the wake of labour disputes, industrialists changed their perception of the relation between industrial health and work efficiency. With the promotion of factory canteens, the Guomidang Nationalists also began to exert unsparing efforts to garner the growing political potential of the labour force. Therefore, factory canteens evolved into a contested space in which workers, management, and the state offered different visions of workers' diets and industrial productivity. [ABSTRACT FROM AUTHOR]

A quantitative framework of firm dynamics is developed where the size of the informal sector is determined by financial constraints and the burden of taxation. Improving access to credit for formal sector firms increases aggregate total factor productivity and output while reducing the size of the informal sector. Introducing size-dependent taxes reduces the gains from financial development as they incentivize firms to produce at a relatively limited scale. The aggregate effects of eliminating formal sector registration costs are positive but modest relative to previous theoretical models and the gains generated by financial development, and consistent with empirical evidence based on micro-level data. [ABSTRACT FROM AUTHOR]

I study the relation between corporate diversification and labor productivity in a sample of over 500,000 firms from 46 countries. Across the entire sample, greater diversification is associated with significantly lower labor productivity. The negative relation between diversification and labor productivity is not stronger in countries with more burdensome employment regulation, but it is significantly stronger in countries with better financial development. In addition, the negative relation is stronger in industries with high capital/labor ratios. Overall, the results suggest that the lower productivity in diversified firms is due more to the misallocation of capital than to the inefficient use of labor. [ABSTRACT FROM PUBLISHER]

Capital markets perform two distinct functions: provision of capital and facilitation of good governance through information production and monitoring. I argue that the governance function has more impact on the efficiency with which resources are utilized within the firm. Based on industry-level data across 38 countries, I present evidence suggesting a positive relation between market-based governance and improvements in industry efficiency. The measures of governance are also positively correlated with productivity improvements and growth in real output. Furthermore, while governance affects efficiency, the capital provision services induce technological change. The evidence underscores the role of capital markets as a conduit of socially valuable governance services as distinct from capital provision. [ABSTRACT FROM AUTHOR]

Overall, I The Economic Consequences of U.S. Mobilization for the Second World War i is a useful contribution to our understanding of the war's impact on and long-term consequences for the development of the American economy. One hopes that I The Economic Consequences of U.S. Mobilization for the Second World War i will provide a lasting antidote to the conventional view of WWII and, for economic historians, serve as a benchmark for future research to assess what was important and what was not in the U.S. economy of the 1940s. (Chapter 8 also contains a very useful decomposition for the contrast between Field's TFP estimates and those of Robert Gordon in I The Rise and Fall of American Growth i .). [Extracted from the article]

In this paper, we develop a small open economy New Keynesian dynamic stochastic general equilibrium (DSGE) model to understand the relative importance of two key technology shocks, Hicks neutral total factor productivity (TFP) shock and investment specific technology (IST) shock for an emerging market economy like India. In addition to these two shocks, our model includes three demand side shocks such as fiscal spending, home interest rate, and foreign interest rate. Using a Bayesian approach, we estimate our DSGE model with Indian annual data for key macroeconomic variables over the period of 1971–2010, and for subsamples of pre-liberalization (1971–1990) and post-liberalization (1991–2010) periods. Our study reveals three main results. First, output correlates positively with TFP, but negatively with IST. Second, TFP and IST shocks are the first and the second most important contributors to aggregate fluctuations in India. In contrast, the demand side disturbances play a limited role. Third, although TFP plays a major role in determining aggregate fluctuations, its importance vis-à-vis IST has declined during the post liberalization era. We find that structural shifts of nominal friction and relative home bias for consumption to investment in the post-liberalization period can account for the rising importance of the IST shocks in India. [ABSTRACT FROM AUTHOR]

We estimate asymmetries in innovations to Solow residuals for 11 Organization for Economic Co-operation and Development (OECD) countries using stochastic frontier analysis. Likelihood ratio statistics and variance ratios imply that all countries with net energy imports have significant negative asymmetries, whereas other countries do not. We construct a simple theoretical model in which the measured Solow residual combines effects from technology, factor utilization, and the terms of trade. For oil importers, the model implies an asymmetric response of measured total factor productivity to oil price increases and decreases. When we condition Solow residuals separately on positive and negative oil price changes to allow asymmetric responses, evidence for remaining negative asymmetric innovations to the Solow residuals vanishes for all countries except Switzerland. Switzerland's relatively dominant financial sector suggests that their asymmetries could be due to a financial crisis, a hypothesis that we test and fail to reject. [ABSTRACT FROM AUTHOR]

This paper uses plant-level estimates of total factor productivity covering 40 years to examine what role, if any, productivity has played in the decline of output share and employment in British manufacturing. The results show that TFP growth in British manufacturing was negative between 1973 and 1982, marginally positive between 1982 and 1994 and strongly positive between 1994 and 2012. Poor TFP performance therefore does not appear to be the main cause of the decline of UK manufacturing. Productivity growth decompositions show that, in the latter period, the largest contributions to TFP growth come from foreign-owned plants, industries that are heavily involved in trade, and industries with high levels of intangible assets. [ABSTRACT FROM AUTHOR]

The United States' postwar period has seen an increase in aggregate market hours worked, a decline in home production hours, and an increase in the consumption to output ratio. A multisector growth model that allows for an increase in total factor productivity in the market sector relative to the home sector can account for these phenomena. Households shift hours to the more productive market sector and purchase measured market goods in favor of unmeasured home goods. This channel accounts for a quarter of the increase in the consumption to output ratio observed in the data from 1950 to 2007. [ABSTRACT FROM AUTHOR]

UK labour productivity is significantly lower than that of many other similarly advanced economies and has been so for decades, with negative implications for UK living standards. To make matters worse, during the last ten years labour productivity growth has stalled in most industrialised countries, and particularly in the UK. This has led to a renewed policy focus on productivity growth, as evidenced by successive government productivity plans and efforts to re-invigorate industrial strategy. This paper reviews the evidence on UK productivity performance, identifying what we know about the causes of its weakness, what we do not know and what this means for policy. We review the evidence through the lens of developments in economic measurement, drawing in particular on the work of National Institute colleagues past and present, and with a view to the key measurement challenges ahead that, unlocked, will help us understand better what is holding back UK productivity. [ABSTRACT FROM AUTHOR]

Perkins and Murmann (2018) advance a provocative thesis, based on Tesla Motors, that 'a well-funded company could develop a new electric vehicle (EV) from scratch and move it into production within 3 to 5 years....' This thesis of feasibility – indeed likelihood – of more new entrant EV automakers is at odds with my recent work (e.g., Jacobides, MacDuffie, & Tae, 2016; MacDuffie, 2013) which argues that automotive OEMs have been able to prevent extensive value migration to suppliers and new entrants due to their structural role as system integrators with the capabilities to manage a primarily integral product and organizational architecture. This role is bolstered by societal demands for OEMs to meet regulatory requirements for safety and handle legal liability claims. These structural features have helped automotive OEMs avoid the fate of IBM, which saw massive value migration, after introducing the modular PC, to Intel and Microsoft (suppliers of key components). These same features, I argue, will position these OEMs for continued centrality, forestalling a wave of successful new entrants despite many new, disruptive changes in technology and business models. [ABSTRACT FROM AUTHOR]

Extant spillover literature explains domestic firms' productivity change mainly by the presence and attributes of foreign direct investment. In contrary, this paper, by adopting a routine-based model of absorptive capacity, intends to explore how domestic firms absorb spillovers over time. Based on a qualitative study of a domestic firm in China's silicone adhesive industry, the findings show that unbounded by geographical constraints, domestic firms enact their external absorptive capacity routines to actively search for spillovers from multinational enterprises (MNEs) at both national and international levels. Moreover, rather than searching for what is available, domestic firms are selective for spillovers that are coherent with their business strategies. The most unexpected finding is that domestic firms diligently acquire spillovers from MNEs and from local competitors in combination. Spillovers acquired from local competitors are used to increase the inferential accuracy of spillovers acquired from MNEs about strategic successes. Further, instead of absorbing spillovers from MNEs which pose moderate technology gaps, domestic firms target at MNEs which exhibit wider technology gaps, and undertake organizational learning and develop complementary assets to enhance their internal absorptive capacity routines. Socially enabling mechanisms are found to facilitate domestic firms' absorption of spillovers by employee turnover. [ABSTRACT FROM AUTHOR]

I introduce a minimum innovation size required for patents into a Schumpeterian growth model. We show that to satisfy the patentability requirement for minimum innovation size, each research and development (R&D) firm targets only industries in which the incumbent's technology is of sufficient obsolescence. This is because the technological gap between innovator and incumbent is greater in industries using older technologies. Although the increase in minimum innovation size reduces the number of industries targeted for R&D, it also increases the amount of R&D investment directed at those targeted industries. Consequently, introducing a minimum innovation size has a nonmonotonic (or negative) effect on the aggregate flow of innovations. Further, by deriving the endogenous long-run distribution of innovation size, we show that an increase in minimum innovation size reduces the mean innovation size. This implies that even if the patent office only grants patents for superior innovations, it causes innovators to produce generally inferior-quality innovations. [ABSTRACT FROM AUTHOR]

Management of cognitive difficulties is a significant unmet need for individuals with stroke. Incorporating multiple functions, including memory aids and communication tools, smartphones have potential to improve everyday cognitive function and independence in daily activities post-stroke. We aimed to investigate patterns of smartphone use, facilitators and barriers to use, and relationships between smartphone use and daily functioning. Twenty-nine participants with stroke and 29 comparison participants with no history of neurological conditions completed measures of smartphone use, objective and subjective cognitive function, mood and community integration. The majority of participants used smartphones, though the proportion of users was lower in the stroke group (62%) than the comparison group (86%). Older participants were less likely to use smartphones. Using apps that support memory was a main benefit of smartphone use post-stroke. In the stroke group, frequent users of memory apps had significantly fewer motor symptoms (d = 1.20), and higher productivity (d = 0.84). Stroke survivors identified difficulty learning how to use smartphones, but only one participant had assistance with this from a clinician. These results suggest that smartphones have potential as assistive technology post-stroke, however, support in using them is essential, particularly for older individuals with motor dysfunction. [ABSTRACT FROM AUTHOR]

Climate regulations tend to target energy-intensive sectors whose products are widely used in industrial production as intermediate inputs, and carbon abatement may be partially offset by intermediate input-led leakage. This paper aims to examine the impact of intermediate input linkages on carbon leakage both theoretically and empirically. The theoretical part develops a Harberger-type model with an input-output linkage structure, identifies four leakage effects and derives closed-form solutions for these leakage effects. Its empirical part builds a computable general equilibrium model of China's economy and introduces structural decomposition analysis to link the theoretical and empirical models. When imposing a carbon price on the electricity generation sector, our results show significant sectoral carbon leakage. Our decomposition analysis further suggests that such leakage is mainly through the production substitution effect and the multiplier effect. Our results highlight the importance of sectoral linkage when discussing the carbon leakage issue of climate policies. [ABSTRACT FROM AUTHOR]

We analyse TFP growth in the US business sector using a basic unobserved component model where trend growth follows a random walk and the noise is a first order autoregression. This is fitted using a Kalman-filter methodology. We find that trend TFP growth has declined steadily from 1.5 to 1.0 per cent per year over the past 50 years. Nevertheless, recent trends are not a good guide to actual medium-term TFP growth. This exhibits substantial variations and is quite unpredictable. Techno-optimists should not give best to productivity pessimists simply because recent TFP growth has been weak. [ABSTRACT FROM AUTHOR]

The impact that output has on future total factor productivity is not internalized by competitive agents. As a result, the allocation that a planner would choose cannot be reached as a competitive equilibrium outcome (neither for infinitely lived agents nor for overlapping generations): the market remuneration to capital and labor is too low. The planner's allocation can nonetheless be implemented by a fiscal policy subsidizing the returns to savings and the wage rate as needed. The exact policy differs depending on whether only past investment or total output influences productivity: in the first case only capital returns need to be subsidized, whereas in the second case labor income needs to be subsidized too. The policy is balanced period by period by means of a lump-sum tax. [ABSTRACT FROM AUTHOR]

This study constructs a variety expansion growth model with public research spending. Public researchers financed by taxes on asset income, consumption, and corporate profits raise the productivity of private research and development. We show that the welfare-maximizing level of public research spending is below the growth-maximizing level. With regard to tax policy, a zero-profit tax maximizes the welfare of households. In addition, the study analyzes the dynamics of the economy, showing that equilibrium is indeterminate when the government's revenue source depends on an asset income tax. [ABSTRACT FROM AUTHOR]

This article offers an overview of the current state of labor markets and pension coverage in a wide sample of Latin America and the Caribbean countries, and proposes a series of possible avenues toward universal coverage, not only as an instrument to fight poverty during old age, but also as part of an agenda for increasing formal employment and productivity growth. We conclude that despite perspectives of low economic growth and reduced fiscal space, the region is going through intense demographic and socio-economic changes, which increase the demand for better jobs and provide a real opportunity for initiating the bold reforms in pensions, labor, and taxes needed to achieve universal coverage. [ABSTRACT FROM AUTHOR]

During several decades and until the end of the 1990s, the theory of structural economic dynamics has been absent in the field of so-called mainstream economic analysis. The literature included only either empirically oriented contributions or developments that were related to so-called critical theoretical approaches of structural change. At the end of the twentieth century, however, mainstream economic theorists changed this situation and began to investigate the field of structural dynamics, often using the Solovian theory of economic growth. During the last two decades, they contributed to change substantially the state of the theory of structural change. This contribution first provides an assessment of the advances realized by these theorists. It then confronts these advances with the so-called alternative or critical theoretical approaches of structural dynamics—namely, Luigi Pasinetti’s contribution and ‘evolutionary’ approaches—in order to provide a more complete picture of structural dynamics in the short and the long run. [ABSTRACT FROM PUBLISHER]

The discussion of the rationalization wave in German industry (1924–1929) still lacks proper industry-level estimates of the rate of technological progress. To close part of this gap, this article investigates total factor productivity (TFP) growth in hard coal mining over the extended period 1913–1938. Stochastic Frontier Analysis is applied to a sample of firms from the Ruhr coal district. TFP grew positively overall and specifically from 1924–1929. Surprisingly, however, TFP growth was even faster from 1933–1938, suggesting that the Nazi economy heavily capitalized on the Weimar rationalization movement, the effects of which are usually not traced beyond 1932. [ABSTRACT FROM AUTHOR]

We present a set of theoretical and empirical papers and briefly describe the specific contributions to the Macroeconomic Dynamics special issue on technology aspects in the process of development. [ABSTRACT FROM AUTHOR]

This paper develops a model to assess the quantitative effects of entry costs and financial frictions on cross-country income and total factor productivity (TFP) differences, with a primary focus on the interaction between entry costs and financial frictions. The model is calibrated to match the establishment-level statistics for the U.S. economy, assuming a perfect financial market. The simulations based on the calibrated model show that entry costs and financial frictions together account for 55% and 46% of the cross-country variation in output and TFP in the data. Moreover, a substantial portion of the variation is accounted for by the interaction between entry costs and financial frictions. The main mechanism is that financial frictions amplify the effect of entry costs. [ABSTRACT FROM AUTHOR]

We propose a sectoral–shift theory of aggregate factor productivity for a class of multisector economies with AK technologies and a constant production possibilities frontier. Loans are partly secured by collateral and partly based on reputation. We find that both the growth rate and total factor productivity (TFP) respond to random and persistent endogenous fluctuations in the sectoral distribution of physical capital, which, in turn, responds to reversible exogenous shifts in relative sector productivities. Endogenous debt limits on secured and unsecured loans slow down capital reallocation, preventing the equalization of risk-adjusted equity yields across sectors. Economywide factor productivity and the aggregate growth rate are both negatively correlated with the dispersion of sectoral rates of return, sectoral TFP, and sectoral growth rates. We also find highly volatile limit cycles in economies with small amounts of collateral. [ABSTRACT FROM AUTHOR]

Recently, mindfulness research has grown quickly, particularly as an avenue to increase productivity and alleviate modern workers' growing stress levels (Hyland, Lee, & Mills, 2015). In a parallel but largely separate literature, work–family1 conflict has received expansive research attention in the last several decades as an important modern stressor. Work–family researchers have repeatedly called for practical interventions and individual strategies such as coping (e.g., Eby, Casper, Lockwood, Bordeaux, & Brinley, 2005; Kossek, Baltes, & Matthews, 2011). As a potential remedy for modern stress with demonstrated utility in the workplace, mindfulness is ideally suited to facilitate workers' efforts to balance their work and personal life domains. The purpose of this commentary is to explore numerous ways through which bridging mindfulness and work–family literatures will advance organizational science and practice. [ABSTRACT FROM PUBLISHER]

A recent finding of the SVAR literature is that the response of hours worked to a (positive) technology shock depends on the assumed order of integration of the hours. In this work we relax this assumption, allowing fractional integration in hours and productivity. We find that the sign and magnitude of the estimated responses depend crucially on the identification assumptions employed. Although the responses of hours recovered with short-run (SR) restrictions are positive in all data sets, long-run (LR) identification results in negative, although sometimes not significant responses. We check the validity of these assumptions with the Sims procedure, concluding that both LR and SR are appropriate to recover responses in a fractionally integrated VAR. However, the application of the LR scheme always results in an increase in sampling uncertainty. Results also show that even the negative responses found in the data could still be compatible with real business cycle models. [ABSTRACT FROM AUTHOR]

We develop a growth model where knowledge is embodied in individuals and diffused across sectors through labor mobility. The existence of labor mobility costs constrains mobility and thus generates labor misallocation. Different levels of labor misallocation imply different levels of exploitation of available knowledge and therefore different total factor productivity across countries. We derive a positive relationship between growth and labor mobility, which is consistent with the empirical evidence, by assuming aggregate constant returns to capital. We also analyze the short- and long-run effects of labor mobility costs in the case of decreasing returns to capital. It turns out that changes in mobility costs have larger economic effects when different types of workers have small rather than large complementarities. Finally, we show that different labor income taxes or labor market tightness imply different rates of labor mobility and therefore can explain differences in Gross Domestic Product across countries. [ABSTRACT FROM AUTHOR]

The article discusses the concept of the Productivity Measurement and Enhancement System (ProMES) as part of the performance management (PM) solution. Discussion of the typical design of the system, which works by targeting motivation and productivity in organization, is provided. The advantages of the approach, which can be successfully implemented in manufacturing, service, and educational setting, are offered.