Appropriate Technology, Human Capital, and Development Accounting

Beatrice Farkas, DIW Berlin

Over the past decade, research explaining cross country income differences has increasingly pointed to the dominant role of total factor productivity (TFP) gaps as opposed to factor accumulation. At the same time, it is a widely held belief that a country's ability to absorb and implement technologies is tied to its human capital. In this paper, we develop a structure where production is allowed to take place over a range of industries whose productivities are asymmetrically tied to the country's human capital. We embed this in an aggregate production function framework and show that this human capital-technology complementarity reduces the role of aggregate TFP in explaining variations in GDP per worker from almost eighty percent to about fifty percent.

About the speaker
Dr. Beatrice Farkas is an applied macroeconomist. Since 2010 she works as a Research Associate at DIW Berlin (German Institute for Economic Research) in the Macroeconomics Department. Prior to joining DIW, she was and Assistant Professor of Economics at FIT/SUNY, New York, NY. She holds a Ph.D in Economics from Louisiana State University, USA. Her primary research interests include macroeconomics, economic growth, ad economic development.

Venue: Conference room (room 0.16 & 0.17)

Date: 11 February 2016

Time: 12:30 - 13:30