皇冠体育app Public and Private MPK
This study unpacks marginal productivity of capital (MPK) into its public and private components
Abstract
Why doesn鈥檛 capita flow to developing countries as predicted by the neoclassical model? Is the explanation simply that cross-country marginal productivity of capital (MPK) is equalized, and if so, why? 皇冠体育app authors revisit these issues by unpacking MPK into its public and private components, since there is good reason to believe that the process of MPK determination is enormously different across the two sectors especially in developing countries. 皇冠体育appy do so by calculating MPK schedules across the two sectors, in a large sample of advanced and developing countries. 皇冠体育app main findings are twofold: Using updated investment data shows that MPK is not only flat but rather slightly positively sloped. More importantly, this finding is mainly driven by the public sector 鈥� public MPK is strongly positively sloped while private MPK is flat. 皇冠体育appy offer a possible intepretation of this surprising result and advance a new explanation for the Lucas paradox related to the behavior of the public sector.
This work is part of the 鈥楳acroeconomics in Low-income countries鈥� programme
Citation
Matthew Lowe & Chris Papageorgiou & Fidel Perez-Sebastian, 2012. 鈥溁使谔逵齛pp Public and Private MPK,鈥� DEGIT Conference Papers c017_021, DEGIT, Dynamics, Economic Growth, and International Trade.