In this paper, we measure TFP losses in China's non-agricultural economy associated with labour and capital misallocation across provinces and sectors between 1985-2007. We also decompose the overall loss into factor market distortions within provinces (between state and non-state sectors) and...

This paper investigates the impact of economic reforms on China's growth in Total Factor Productivity (TFP). I build a model with two sectors in production -- the private and the state sectors -- that features capital market imperfections on the private sector.Following the removal of...

International trade is frequently thought of as a production technology in which the inputs are exports and the outputs are imports. Exports are transformed into imports at the rate of the price of exports relative to the price of imports: the reciprocal of the terms of trade. Cast this way, a...

All industrialized countries have experienced a transition from high birth rates, land-based production and stagnant standards of living to low birth rates and sustained income growth. To develop a better understanding of these economic and demographic transformations and the link between them,...

We study the competitive equilibria of a two-country endogenous growth model in which the source of growth is the linearity of technology in reproducible inputs. We begin by showing that in a model with no externalities there is a unique equilibrium; however, there are multiple ways in which the...

A large portion of differences in output per capita across countries is explained by differences in total factor productivity (TFP). In this article, we summarize a recent literature — and the articles in this special issue on misallocation and productivity — that focus on the...

This paper evaluates the role of internal capital markets in business groups for allocating capital to its most productive use. A quantitative model in which business groups arise endogenously as substitutes for imperfect credit markets explains several stylized facts about establishment size...