14 Jan 2002
The Driving Forces of Economic Growth
This paper discusses links between policy settings, institutions and economic growth in OECD countries on the basis of pooled cross-country time-series regressions. The novel econometric approach used in the paper allows short-term adjustments and convergence speeds to vary across countries, in accordance with most theoretical models, while imposing restrictions only on the longrun coefficients. In addition to the "primary" influences of physical and human capital accumulation, the results confirm the importance for growth of R&D activity, the macroeconomic environment, trade openness and well developed financial markets. They also confirm that many of the policy influences operate not only via the overall efficiency of factor use but also indirectly via the mobilisation of resources for fixed investment.
14 Jan 2002
Growth effects of education and social capital in the OECD countries
This paper surveys the empirical literature on the growth effects of education and social capital. The main focus is on the cross-country evidence for the OECD countries, but the paper also briefly reviews evidence from labour economics, to clarify where empirical work on education using macro data may be relatively useful. It is argued that on balance, the recent cross-country evidence points to productivity benefits of education that are at least as large as those identified by labour economists. The paper also discusses the implications of this finding. Finally, the paper reviews the emerging literature on the benefits of social capital. Since this literature is still in its early days, policy conclusions are accordingly harder to find.
14 Jan 2002
R&D and Productivity Growth
This study investigates the long-term effects of various types of R&D on multi-factor productivity growth, which are the spillover effects of R&D activities. Econometric estimates are conducted on a panel of 16 OECD countries, over the period 1980-98. All results are averages over countries and time, and little can be said about country specificities. Major results are as follows: an increase of 1 per cent in business R&D generates 0.13 per cent in productivity growth. The effect is larger in countries that are intensive in business R&D, and in countries where the share of defence-related government funding is lower; a 1 per cent increase in foreign R&D generates 0.46 per cent in productivity growth, and the effect is larger in countries intensive in business R&D; 1 per cent more in public R&D generates 0.17 per cent in productivity growth. The effect is larger in countries where the share of universities (as opposed to government labs) is higher, in countries where the share of defence R&D is lower, and in countries which are intensive in business R&D.
14 Jan 2002
This paper discusses the main measurement issues in calculating productivity indicators, and provides guidance to researchers and statisticians in addressing these difficulties. It draws on the OECD Productivity Manual and on recent OECD work on productivity levels. The paper examines a range of issues related to the measurement of productivity growth, including the choice of output measure (gross output versus value added), the measurement of output, labour and capital input, as well as index number issues. It also discusses OECD estimates of productivity levels and the key measurement issues in deriving these estimates, including the appropriate conversion from one currency unit to another. A final section discusses the interpretation of productivity measures, including their most common applications and the possible pitfalls. The paper concludes that substantial progress has been made in recent years to improve the comparability of productivity statistics. In many countries, however, basic source data are still the key limitation to the development of comparable indicators of productivity. In addition, statisticians, researchers and policy makers need to be more aware of the appropriate uses and interpretation of productivity statistics.
14 Jan 2002
Estimating the structural rate of unemployment for the OECD countries
The paper first reviews the conceptual framework underlying different measures of structural unemployment as well as alternative empirical methods that have been used to provide estimates of them. Drawing on this review, it goes on to develop a method for estimating time-varying NAIRUs across a range of OECD countries using a Kalman filter. It then discusses the resulting econometric estimates, and the scope for their further refinement given the associated range of uncertainties. Recent trends in the NAIRU estimates are reviewed: they fell in many countries in the second half of the 1990s, although actual unemployment has remained well above the NAIRU for a majority of countries throughout much of the 1990s, particularly in Europe. Finally, the relevance of such measures to analysing inflation developments and monetary policy is discussed.