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ON THE EVOLUTION OF TOTAL FACTOR PRODUCTIVITY IN LATIN AMERICA
Author(s) -
FERREIRA PEDRO CAVALCANTI,
PESSÔA SAMUEL DE ABREU,
VELOSO FERNANDO A.
Publication year - 2013
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2011.00430.x
Subject(s) - latin americans , total factor productivity , economics , productivity , industrialisation , presumption , international economics , international trade , macroeconomics , political science , market economy , law
Because of several policy distortions, including import‐substitution industrialization, widespread government intervention, and both domestic and international competitive barriers, there has been a general presumption that Latin America has been much less productive than the leading economies in the last decades. In this paper we show, however, that until the late 1970s Latin American countries had high productivity levels relative to the United States. It is only after the late 1970s that we observe a fast decrease of relative total factor productivity (TFP) in Latin America. We also show that the inclusion of human capital in the production function makes a crucial difference in the TFP calculations for Latin America. ( JEL O11, O47, O54)