The Solow residual, a distributional approach: The case of Chile, 1985-2019
The primary goal of this paper is to present a distributive proposal for reinterpreting Solow’s residual and apply it within the Chilean context. We argue that Solow’s residual can only indirectly capture technological phenomena. This critique draws upon the contribution of Felipe and McCombie (202...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Associazione Economia civile
2024-10-01
|
| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18663 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850282884706861056 |
|---|---|
| author | Fernando Villanueva Melo |
| author_facet | Fernando Villanueva Melo |
| author_sort | Fernando Villanueva Melo |
| collection | DOAJ |
| description |
The primary goal of this paper is to present a distributive proposal for reinterpreting Solow’s residual and apply it within the Chilean context. We argue that Solow’s residual can only indirectly capture technological phenomena. This critique draws upon the contribution of Felipe and McCombie (2020), who contend that production functions merely reflect an identity account. Hence, the so-called Total Factor Productivity (TFP) mirrors the dynamic of real wages and the rate of profit.
We adopt a descriptive approach to estimate and decompose the Solow residual growth for the Chilean economy, to discern the origins of distributional changes between 1985 and 2019. A key patterns is that throughout almost the entire period, the dynamic of the Solow residual is closely intertwined with fluctuations in the profit rate. Additionally, we decompose the profit rate to highlight that the decline in the Chilean economy’s profit rate stems from both distributional and technological factors.
|
| format | Article |
| id | doaj-art-b8d12ae8439c4ea8bf5ba5357c7dcf54 |
| institution | OA Journals |
| issn | 2037-3635 2037-3643 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj-art-b8d12ae8439c4ea8bf5ba5357c7dcf542025-08-20T01:47:51ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432024-10-017731010.13133/2037-3643/18663The Solow residual, a distributional approach: The case of Chile, 1985-2019Fernando Villanueva Melo0National Statistics Institute of Chile (INE) The primary goal of this paper is to present a distributive proposal for reinterpreting Solow’s residual and apply it within the Chilean context. We argue that Solow’s residual can only indirectly capture technological phenomena. This critique draws upon the contribution of Felipe and McCombie (2020), who contend that production functions merely reflect an identity account. Hence, the so-called Total Factor Productivity (TFP) mirrors the dynamic of real wages and the rate of profit. We adopt a descriptive approach to estimate and decompose the Solow residual growth for the Chilean economy, to discern the origins of distributional changes between 1985 and 2019. A key patterns is that throughout almost the entire period, the dynamic of the Solow residual is closely intertwined with fluctuations in the profit rate. Additionally, we decompose the profit rate to highlight that the decline in the Chilean economy’s profit rate stems from both distributional and technological factors. https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18663Solow residualtotal factor productivityfunctional income distributionwages productivityrate of profitChile |
| spellingShingle | Fernando Villanueva Melo The Solow residual, a distributional approach: The case of Chile, 1985-2019 PSL Quarterly Review Solow residual total factor productivity functional income distribution wages productivity rate of profit Chile |
| title | The Solow residual, a distributional approach: The case of Chile, 1985-2019 |
| title_full | The Solow residual, a distributional approach: The case of Chile, 1985-2019 |
| title_fullStr | The Solow residual, a distributional approach: The case of Chile, 1985-2019 |
| title_full_unstemmed | The Solow residual, a distributional approach: The case of Chile, 1985-2019 |
| title_short | The Solow residual, a distributional approach: The case of Chile, 1985-2019 |
| title_sort | solow residual a distributional approach the case of chile 1985 2019 |
| topic | Solow residual total factor productivity functional income distribution wages productivity rate of profit Chile |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18663 |
| work_keys_str_mv | AT fernandovillanuevamelo thesolowresidualadistributionalapproachthecaseofchile19852019 AT fernandovillanuevamelo solowresidualadistributionalapproachthecaseofchile19852019 |