VENEZUELA'S GROWTH EXPERIENCE

The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and...

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Autores principales:	BELLO,OMAR D, BLYDE,JUAN S, RESTUCCIA,DIEGO
Lenguaje:	English
Publicado:	Pontificia Universidad Católica de Chile. Instituto de Economía. 2011
Materias:	Productivity physical capital misallocation policies
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200005
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spelling	oai:scielo:S0719-043320110002000052012-05-29VENEZUELA'S GROWTH EXPERIENCEBELLO,OMAR DBLYDE,JUAN SRESTUCCIA,DIEGO Productivity physical capital misallocation policies The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and collapse episodes? Using a standard development accounting framework, we show that the growth episode is mainly accounted for by an increase in capital accumulation and knowledge transfer associated with the foreign direct investment in the booming oil industry. The collapse episode is accounted for equally by a fall in total factor productivity and in capital accumulation. We analyze Venezuela during the collapse episode in the context of a model of heterogeneous production units were policies and institutions favour unproductive in detriment of more productive activities. These policies generate misallocation, lower TFP, and a decline in capital accumulation. We show in the context of an heterogeneous-establishment growth model that distortionary policies can explain a large portion of the current differences in TFP, capital accumulation, and income per capita between Venezuela and the United States.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.48 n.2 20112011-11-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200005en10.4067/S0719-04332011000200005
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	Productivity physical capital misallocation policies
spellingShingle	Productivity physical capital misallocation policies BELLO,OMAR D BLYDE,JUAN S RESTUCCIA,DIEGO VENEZUELA'S GROWTH EXPERIENCE
description	The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and collapse episodes? Using a standard development accounting framework, we show that the growth episode is mainly accounted for by an increase in capital accumulation and knowledge transfer associated with the foreign direct investment in the booming oil industry. The collapse episode is accounted for equally by a fall in total factor productivity and in capital accumulation. We analyze Venezuela during the collapse episode in the context of a model of heterogeneous production units were policies and institutions favour unproductive in detriment of more productive activities. These policies generate misallocation, lower TFP, and a decline in capital accumulation. We show in the context of an heterogeneous-establishment growth model that distortionary policies can explain a large portion of the current differences in TFP, capital accumulation, and income per capita between Venezuela and the United States.
author	BELLO,OMAR D BLYDE,JUAN S RESTUCCIA,DIEGO
author_facet	BELLO,OMAR D BLYDE,JUAN S RESTUCCIA,DIEGO
author_sort	BELLO,OMAR D
title	VENEZUELA'S GROWTH EXPERIENCE
title_short	VENEZUELA'S GROWTH EXPERIENCE
title_full	VENEZUELA'S GROWTH EXPERIENCE
title_fullStr	VENEZUELA'S GROWTH EXPERIENCE
title_full_unstemmed	VENEZUELA'S GROWTH EXPERIENCE
title_sort	venezuela's growth experience
publisher	Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate	2011
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200005
work_keys_str_mv	AT belloomard venezuelasgrowthexperience AT blydejuans venezuelasgrowthexperience AT restucciadiego venezuelasgrowthexperience
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VENEZUELA'S GROWTH EXPERIENCE

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