The marginal product of capital
By: Francesco Caselli, James Feyrer.
Contributors: Feyrer, James Donald.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11551; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11551.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Capital -- Mathematical models.; Marginal productivity -- Mathematical models.
Description: "Whether or not the marginal product of capital (MPK) differs across countries is a question that keeps coming up in discussions of comparative economic development and patterns of capital flows.  Attempts to provide an empirical answer to this question have so far been mostly indirect and based on heroic assumptions.  The first contribution of this paper is to present new estimates of the cross-country dispersion of marginal products.  We find that the MPK is much higher on average in poor countries.  However, the financial rate of return from investing in physical capital is not much higher in poor countries, so heterogeneity in MPKs is not principally due to financial market frictions.  Instead, the main culprit is the relatively high cost of investment goods in developing countries.  One implication of our findings is that increased aid flows to developing countries will not significantly increase these countries' incomes"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 8/25/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.