The Next Generation of the Penn World Table Feenstra, Robert C.; Inklaar, Robert; Timmer, Marcel P.
The American economic review,
10/2015, Volume:
105, Issue:
10
Journal Article
Peer reviewed
Open access
We describe the theory and practice of real GDP comparisons across countries and over time. Version 8 of the Penn World Table expands on previous versions in three respects. First, in addition to ...comparisons of living standards using components of real GDP on the expenditure side, we provide a measure of productive capacity, called real GDP on the output side. Second, growth rates are benchmarked to multiple years of cross-country price data so they are less sensitive to new benchmark data. Third, data on capital stocks and productivity are (re)introduced. Applications including the Balassa-Samuelson effect and development accounting are discussed.
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Slicing Up Global Value Chains Timmer, Marcel P.; Erumban, Abdul Azeez; Los, Bart ...
The Journal of economic perspectives,
04/2014, Volume:
28, Issue:
2
Journal Article
Peer reviewed
Open access
In this paper, we “slice up the global value chain” using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value ...added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities.
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This article describes the contents and the construction of the EU KLEMS Growth and Productivity Accounts. This database contains industry-level measures of output, inputs and productivity for 25 ...European countries, Japan and the US for the period from 1970 onwards. The article considers the methodology employed in constructing the database and shows how it can be useful in comparing productivity trends. Although growth accounts are the organising principle, it is argued that the database is useful for a wider range of applications. We give some guidance to prudent use and indicate possible extensions.
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Exporting through global value chains (GVCs) has recently been highlighted as a panacea for weak industrialisation trends in the South. We study the long-run effects of GVC participation for a large ...set of countries between 1970 and 2008. We find strong evidence for the positive effects on productivity growth in the formal manufacturing sector. This effect is stronger when the gap with the global productivity frontier is larger. However, we find no evidence for a positive effect on employment generation. These findings also hold in analyses of sub-sets of countries and industries and are robust to the inclusion of non-manufacturing employment.
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This article provides guidance to prudent use of the World Input–Output Database (WIOD) in analyses of international trade. The WIOD contains annual time‐series of world input–output tables and ...factor requirements covering the period from 1995 to 2011. Underlying concepts, construction methods and data sources are introduced, pointing out particular strengths and weaknesses. We illustrate its usefulness by analyzing the geographical and factorial distribution of value added in global automotive production and show increasing fragmentation, both within and across regions. Possible improvements and extensions to the data are discussed.
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In a recent contribution to the AER, Koopman, Wang, and Wei (2014) proposed a decomposition of a country's gross exports into valueadded components and double-counted terms. It is motivated by ...complex manipulation of basic accounting identities. In this comment we provide an alternative framework based on "hypothetical extraction." This parsimonious approach provides a clear definition of domestic value added in exports and has a natural extension into decompositions of bilateral export flows.
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ABSTRACT
Denser networks of intermediate input flows between countries suggest ongoing international fragmentation of production chains. But is this process mainly taking place between countries ...within a region, or is it truly global? We provide new macroeconomic evidence by extending the Feenstra and Hanson () measure of fragmentation to a multicountry setting. We derive the distribution of value added by all countries involved in the production chain of a particular final good. This is based on a new input–output model of the world economy, covering 40 countries and 14 manufacturing product groups. We find that in almost all product chains, the share of value added outside the country‐of‐completion has increased since 1995. This is mainly added outside the region to which the country‐of‐completion belongs, suggesting a transition from regional production systems to “Factory World.” This tendency was only briefly interrupted by the financial crisis in 2008.
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Since the mid-1990s, labor productivity growth in Europe has significantly slowed compared to earlier decades. In contrast, labor productivity growth in the United States accelerated, so that a new ...productivity gap has opened up. This paper shows that this development is attributable to the slower emergence of the knowledge economy in Europe. We consider various explanations which are not mutually exclusive. These include lower growth contributions from investment in information and communication technology; the small share of information and communications technology–producing industries in Europe; and slower multifactor productivity growth, which proxies for advances in technology and innovation. Underlying these are issues related to the functioning of European labor markets and the high level of product market regulation in Europe. The paper emphasizes the key role of market service sectors in accounting for the productivity growth divergence between the two regions. We argue that improved productivity growth in Europe's market services will be needed to avoid a further widening of the productivity gap.
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Functional specialisation in trade Timmer, Marcel P; Miroudot, Sébastien; de Vries, Gaaitzen J
Journal of economic geography,
01/2019, Volume:
19, Issue:
1
Journal Article
Peer reviewed
Open access
Abstract
Production processes are fragmenting across borders with countries trading tasks rather than products. Export statistics based on value added reveal a process of vertical specialisation. ...Yet, what do countries do when exporting? In this article, we provide novel evidence on functional specialisation (FS) in trade. We find surprisingly large and pervasive heterogeneity in specialisation across countries. A positive (negative) correlation between GDP per capita and specialisation in R&D (fabrication) functions is documented. Specialisation in management and marketing functions is unrelated to income. We show how our approach can be easily extended to study FS in trade at the sub-national level. We argue that this is needed to better understand the potential for regional development under global integration.
Why has European growth slowed down since the 1990s while American productivity growth has speeded up? This book provides a thorough and detailed analysis of the sources of growth from a comparative ...industry perspective. It argues that Europe's slow growth is the combined result of a severe productivity slowdown in traditional manufacturing and other goods production, and a concomitant failure to invest in and reap the benefits from Information and Communications Technology (ICT), in particular in market services. The analysis is based on rich new databases including the EU KLEMS growth accounting database and provides detailed background of the data construction. As such, the book provides new methodological perspectives and serves as a primer on the use of data in economic growth analysis. More generally, it illustrates to the research and policy community the benefits of analysis based on detailed data on the sources of economic growth.
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