TECHNOLOGICAL PROGRESS, INCOME DISTRIBUTION AND CAPACITY UTILISATION: A COMPUTER SIMULATION-BASED ANALYSIS

The paper presents a post-keynesian growth model in which (i) the mark-up rate varies in the long-term due to a misalignment between the actual rate and the 'desired' profit rate; and (ii) the capital-output ratio is not necessarily constant, on the contrary it may shift as a result of the technological progress, which according the Harrod's typology can be neutral, capital saving or capital intensive. We demonstrate that the economic stability is only reached if the technological progress is neutral or capital intensive and the investiment is susceptible to fluctuations in the mark-up rate. After undergoing computer simulations, we noticed that an endogenous transition from a wage-led to a profit-led accumulation regime is feasible. Furthermore, we identified a tendency to the stabilization of the profit rate, conditioned to a high savings out of profits ratio.

About a Coincidente Index for the State of the Economy

The construction of coincident indexes for the economic activity of a country is a common practice since the fifties. The methodologies vary from heuristic methods to probabilistic or statistical ones. In this paper, we present a new procedure for estimating a coincient index of the state of the economy which is optimum in a statiscal sense. This procedure is based on state space models that do possess the steady-state property.We apply our methodology for computing a coincident index for the Colombian economy.State of the economy, Coincidente Index, State Space Models.

Productivity and the welfare of nations

We show that the welfare of a countryís infinitely-lived representative consumer is summarized, to a first order, by total factor productivity (TFP) and by the capital stock per capita. These variables suffice to calculate welfare changes within a country, as well as welfare differences across countries. The result holds regardless of the type of production technology and the degree of product market competition. It applies to open economies as well, if TFP is constructed using domestic absorption, instead of gross domestic product, as the measure of output. Welfare relevant TFP needs to be constructed with prices and quantities as perceived by consumers, not firms. Thus, factor shares need to be calculated using after-tax wages and rental rates, and will typically sum to less than one. These results are used to calculate welfare gaps and growth rates in a sample of advanced countries with high-quality data on output, hours worked, and capital. We also present evidence for a broader sample that includes both advanced and developing countries

A Leading Index for the Colombian Economic Activity

In this paper,we propose a methodology for calculating a leading index of the economic activity based on a modification of Stock and Watson's (1989, 1991, 1992) approach. We use Kalman filter techniques for estimating the state space representation of the leading index model. The methodology is applied to the Colombian economy and the resulting index leads six months the Melo et al. (2002) coincident index (in semi-annual growt rates). As an intermediate result, we also develop an updating process of the coincident index.Coincident indexes, leading indexes, state space models.

Productivity, welfare and reallocation : theory and firm-level evidence

A considerable literature has focused on the determinants of total factor productivity (TFP), prompted by the empirical finding that TFP accounts for the bulk of long-term growth. This paper offers a deeper reason for such focus: the welfare of a representative consumer is summarized by current and anticipated future Solow productivity residuals. The equivalence holds for any specification of technology and market structure, as long as the representative household maximizes utility while taking prices parametrically. This result justifies total factor productivity as the right summary measure of welfare, even in situations where it does not properly measure technology, and makes it possible to calculate the contributions of disaggregated units (industries or firms) to aggregate welfare using readily available data. Based on this finding, the authors compute firm and industry contributions to welfare for a set of European countries (Belgium, France, Great Britain, Italy, Spain) using industry-level and firm-level data. With additional assumptions about technology and market structure (specifically, that firms minimize costs and face common factor prices), the authors show that welfare change can be further decomposed into three components that reflect, respectively, technical change, aggregate distortions, and allocative efficiency. Then, using the appropriate firm-level data, they assess the importance of each of these components as sources of welfare improvement in the same set of European countries.Economic Theory&Research,E-Business,Economic Growth,Labor Policies,Technology Industry

Productivity, Welfare and Reallocation: Theory and Firm-Level Evidence

We prove that the change in welfare of a representative consumer is summarized by the current and expected future values of the standard Solow productivity residual. The equivalence holds if the representative household maximizes utility while taking prices parametrically. This result justifies TFP as the right summary measure of welfare (even in situations where it does not properly measure technology) and makes it possible to calculate the contributions of disaggregated units (industries or firms) to aggregate welfare using readily available TFP data. Based on this finding, we compute firm and industry contributions to welfare for a set of European OECD countries (Belgium, France, Great Britain, Italy, Spain), using industry-level (EU-KLEMS) and firm-level (Amadeus) data. After adding further assumptions about technology and market structure (firms minimize costs and face common factor prices), we show that welfare change can be decomposed into three components that reflect respectively technical change, aggregate distortions and allocative efficiency. Then, using the appropriate firm-level data, we assess the importance of each of these components as sources of welfare improvement in the same set of European countries.productivity, welfare, reallocation, technology, TFP