Variation in factor shares, extensively documented in recent years, implies that standard growth accounting exercises are plagued by measurement issues. First, the standard assumption of constant shares generates a bias in the estimation of the contribution of factors to economic growth. Second,...

We claim that the standard methodology to study the effects of the reallocation of factors on growth is not adequate in the presence of biased innovations. Labor-saving innovations increase output per worker and may decrease the marginal productivity of labor. Therefore, a reallocation of labor...