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Capital and Trade As Engines of Growth in France: An Application of Johansen's Cointegration Methodology
Author:
Mr. David T. Coe
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and
Mr. Reza Moghadam
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Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 011
Language:
English
Publication Date:
01 Feb 1993
DOI:
https://doi.org/10.5089/9781451925975.001
ISBN:
9781451925975
ISSN:
1018-5941
Pages:
36
Keywords:
WP; capital; estimate; production function; vector; likelihood ratio test; EC variable; integrating vector; R&D capital; EC trade integration variable; EC integration; Potential output; Production growth; Corporate sector; Stocks; Eastern Europe; East Asia; Southeast Asia; Asia and Pacific
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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An aggregate production function is estimated with recent cointegrating techniques that are particularly appropriate for estimating long-run relationships. The empirical results suggest that the growth of output in France has been spurred by increased trade integration within the European Community and by the accumulation not only of business sector capital—the only measure of capital included in most empirical studies—but also by the accumulation of government infrastructure capital, residential capital, and R&D capital. Calculations of potential output indicate that trade and capital—broadly defined—account for all of the growth in the French economy during the last two decades.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund