Keywords: Putty-clay, embodied technology, productivity growth, convergence
Abstract: We consider a neoclassical interpretation of Germany and Japan's rapid
postwar growth that relies on a catch-up mechanism through capital
accumulation where technology is embodied in new capital goods. Using
a putty-clay model of production and investment, we are able to
capture many of the key empirical properties of Germany and Japan's
postwar transitions, including persistently high but declining rates
of labor and total-factor productivity growth, a U-shaped response of
the capital-output ratio, rising rates of investment and employment,
and moderate rates of return to capital.
Full paper (302 KB PDF)
Home | FEDS | List of 2001 FEDS papers
To comment on this site, please fill out our feedback form.
Last update: February 13, 2001