EFZG working paper series, No. 02, 2014.
Other
Relative importance of growth factors in Croatia
Josip Tica
orcid.org/0000-0001-7937-1573
; Faculty of Economics and Business, University of Zagreb
Ivana Grgurev
; Energetski institut Hrvoje Požar
Abstract
The goal of this paper is to estimate relative importance of growth factors in Croatia during 1997-2012.
Basic growth accounting methodology is used on quarterly data. Physical capital data is estimated using
permanent inventory methodology and methodology for the initial level of capital is selected based on the
previous estimates of physical capital on much longer annual datasets. Due to usage of quarterly data and
the lack of availability of data, estimate ignores qualitative changes in the quality of labor. Contribution of
the total factor productivity to GDP growth is estimated to 57.2%, physical capital contributes 45.4%, while
the role of raw labor is small and negative -3.3%. The fact that growth in total factor productivity have
equally important role as an accumulation of physical implies that economic policy should pay equal
attention to TFP friendly structural reforms as much as reforms targeted at attracting and supporting real
investments.
Keywords
growth factors; growth accounting; permanent inventory methodology; Solow rezidual; TFP
Hrčak ID:
136631
URI
Publication date:
19.3.2014.
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