Abstract
This Selected Issues paper analyzes the background, stages and developments, and estimation of the direct costs of Paraguay's banking crisis. The paper provides the estimates on the size and evolution of the informal sector, and examines the extent to which the national accounts capture informal activity. The study also estimates the potential output and total factor productivity by examining trends in output, investment, and population growth as well as the direction and size of fiscal impulse on its economy. The paper also provides a statistical appendix report of Paraguay.
III. Potential Output1
This note derives estimates of potential output and total factor productivity in Paraguay by examining trends in output, investment and population growth.
Figure 3 shows a historical time series of real GDP growth, together with an estimate for potential output that is derived below. The figure illustrates the stagnation during the politically unstable period that followed on the Chaco war (1932–38) and led up to the civil war of 1947/48, which is marked by a pronounced recession. Growth recovers towards the end of the 1950s, accelerates during the 1960s, and culminates in the boom of the late 1970s. This boom was related to the construction of the Itaipú hydroelectric dam on the border with Brazil. During the 1980s, the country slides into a prolonged recession, and since then, Paraguay has experienced virtually no growth in per-capita income.
Actual and Potential GDP Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Actual and Potential GDP Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Actual and Potential GDP Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
A. The Input Method
Assume that the supply side of the model is given by a Cobb-Douglas production function:
where Y is output, A is total factor productivity, K is capital and N is labor. Alternatively, with lower-case letters denoting logs,
Data permitting, potential output can be calculated as the sum of inputs and total factor productivity. Rather long time series are available on population and real GDP by expenditure for Paraguay. A World Bank country study2 contains real GDP numbers dating back to the end of the Chaco war in 1938. Population data are available in the Fund’s International Financial Statistics since 1945 and can be extrapolated to earlier years, as the growth rate was quite stable. There are, however, no data on the capital stock. The strategy of this paper is to calculate potential GDP as follows: (1) a capital stock series is constructed, (2) capital and labor inputs are subtracted from actual GDP to obtain total factor productivity, and (3) a Hodrick-Prescott filter is applied to productivity to extract a trend. Trend productivity is then added back onto the inputs to obtain potential GDP.
B. Estimating the Capital Stock
With a long time series on investment at hand, it is possible to estimate the capital stock with a sufficient degree of precision. The approach that will be used is known as the perpetual-inventory method. A time series of the capital stock is constructed from real investment data plus two assumptions concerning the initial capital stock and the rate of depreciation.3 In general, the capital stock evolves according to:
If the capital stock of the year 1938 and the depreciation rate δ were known, then constructing the time series would just mean adding net investment to the initial capital stock. However, both need to be estimated. The assumption about the initial value is less critical, since this value completely depreciates within 10-20 years. As one moves to later years, the capital stock series is driven mainly by new investment. The series is more sensitive with regards to the choice of the depreciation rate. For industrialized countries, a value of 5 percent per year is generally used. It is often argued, however, that depreciation in developing countries is higher, because the structure of their economies is changing more rapidly. In Paraguay, a benchmark estimate of 10 percent per year will be used. The reasons for this choice will be discussed below in conjunction with the behavior of the Solow residual. The initial capital stock is constructed by using the fact that over the long run (in the steady state), the growth rates of output and capital tend to be equal:
Combining this with the equation on capital accumulation yields the steady-state relation
where a star denotes steady state values. For gy, the average growth rate of 4.2 percent per year during the period 1938–99 will be used.
As Figure 4 shows, investment as a percent of GDP remained fairly low until the mid 1950s, reflecting the pronounced political instability that characterized the aftermath of the Chaco war. After the situation calmed down, the investment ratio began to climb and peaked at almost 30 percent of GDP in 1981, as construction at Itaipú—the world’s largest hydroelectric plant—was completed. In the mid-1980s, the investment ratio fell back to around 20 percent, with a declining trend in the late 1990s.
Investment in Percent of GDP
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Investment in Percent of GDP
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Investment in Percent of GDP
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Figure 5 shows the resulting capital stock series for Paraguay in billions of 1982 guaranies (in logs). As a result of very low investment, the capital stock declined during the 1940s and early 1950s. Then, growth resumed and capital increased at an accelerating rate until the early 1980s, when Itaipú was completed. Subsequent capital accumulation continued at a slower pace, contributing to the disappointing growth performance of the last two decades. The capital-labor ratio has remained approximately constant since 1983, suggesting that there was almost no capital deepening in the economy.
Capital Stock of Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Capital Stock of Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Capital Stock of Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
C. Population Growth
Figure 6 shows the growth rate of population, which is taken as a proxy for the growth of labor. This variable reaches a maximum of 3½ percent during the late 1970s and early 1980s, after which it slowly declines to 2.6 percent in 1999.
Population Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Population Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Population Growth in Paraguay, 1938–99
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
D. The Solow Residual
By subtracting capital and labor from real GDP, a time series for factor productivity can be obtained. However, an assumption has to be made about the income shares of labor and capital (1-α and α, respectively) in the production function. Household surveys show that around 85 percent of average income are wages and salaries, and 15 percent originate from capital.4 This is consistent with data from national accounts statistics: the share of dependent labor in national income was 37 percent in 1998. 58 percent of income was produced in small and family-run businesses. Assuming that at least 80 percent of the latter corresponds to labor and adding it to the 37 percent of wage income, confirms a total labor share of around 0.85.5
Figure 7 shows the resulting time series for factor productivity a, and a Hodrick-Prescott smoothing. It is worrisome to find factor productivity on a slow decline during the last two decades, by an overall 4 percent between 1980 and 1999. This stands in marked contrast to the experience of other countries with a similar record of macroeconomic stability as Paraguay. Independent confirmation of this trend comes from labor market data. Real wages (expressed in producer prices) followed a similar decline of around 4 percent over the same period of time, which suggests that the economy leveled off at a low steady state. In a steady state, real wages grow at roughly the same pace as factor productivity, and the ratio of capital to labor is constant. Both phenomena are observed in Paraguay since 1982, highlighting the shortcomings of the country’s present growth model, which is based on raw input expansion only. Owing to a scarcity of infrastructure and human capital, and to problems in governance and the judicial system, total factor productivity has not grown in line with basic inputs. Paraguay is thus beginning to experience diminishing returns on raw labor and physical capital, the factors that were the traditional engines of growth.
Total Factor Productivity (the Solow Residual) in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Total Factor Productivity (the Solow Residual) in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
Total Factor Productivity (the Solow Residual) in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
The disappointing productivity performance warrants more detailed scrutiny. To gauge the effects of data deficiencies, sensitivity analyses were conducted with respect to investment and GDP data, as well as to the parametric assumptions. As noted in section 3 of this report, official numbers might underestimate true GDP by between 15 and 24 percent, due to the presence of unidentified informal activities. However, as shown in the same section, the relative size of the informal sector seems to be constant over time. As long as investment data are accurate and the process of capital accumulation is captured adequately, this bias does not affect the trend of productivity. It only leads to a parallel downward shift in the level of the Solow residual. The situation would be different if investment data have large measurement errors or if the assumption on depreciation is inappropriate. An over-estimation of investment could mean that some productivity growth is not identified. However, in the national accounts statistics of Paraguay, investment is probably the most reliable and easiest to derive category. Since the country imports basically all its capital equipment, the time series can easily be reconstructed by adding capital imports to the volume of construction. Thus, the measurement error appears not to be large. On the other hand, a lower estimate for depreciation (say, 7.5 percent) would lead to an even stronger decline in productivity. By referring to the behavior of real wages mentioned above, the choice of 10 percent for the depreciation rate seems defensible. Finally, the trend in total factor productivity is sensitive to the choice of the parameter α. A higher labor share leads to faster productivity growth. The chosen value of 0.85 may already be on the high side, being slightly above common estimates for industrialized countries.
To sum up, the case for stagnating or even declining productivity in Paraguay is quite robust. Likely reasons for this decline include the neglect of infrastructure, education and health, but also the weak judiciary system and pervasive governance problems. This creates a climate of uncertainty about basic property rights and important disincentives to invest.
E. Potential Output and the Output Gap
Adding together the capital stock, population and trend factor productivity gives an estimate for potential output. The growth rate of potential GDP has averaged 2.6 percent per year during the 1990s, or slightly less than the rate of population growth. Figure 8 shows the output gap obtained with this estimate for potential output. The output gap is defined as the percentage deviation of actual from potential output. The figure shows the recession of the mid-1980s, which followed an unsustainable boom towards the completion of Itaipú. The economy recovered during the early 1990s, and overheated in the mid-1990s on account of a boom in the financial sector and busy border trade around Ciudad del Este. The banking crisis put an end to this expansion, and a severe regional terms-of-trade shock pushed Paraguay to more than 4 percent below potential in 1999.
The Output Gap in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
The Output Gap in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
The Output Gap in Paraguay
Citation: IMF Staff Country Reports 2000, 051; 10.5089/9781451832365.002.A003
F. Summing Up
After the end of the construction boom of Itaipú in the early 1980s, the traditional growth model of Paraguay appears exhausted and the country has stagnated in terms of income per-capita. Most worrisome is the absence of growth in factor productivity. This may be linked to deficiencies in education, health and infrastructure, but also to a weak judiciary and governance problems. Potential GDP growth has averaged only 2.6 percent over the 1990s, or just about the rate of population growth. In recent years, a financial crisis and a severe deterioration of the terms-of-trade have pushed the country to several points below this potential.
Historical Data on the Production Function
In billions of Guaranies of 1982.
In percent.
In millions.
Historical Data on the Production Function
| Actual | Potential | Output | Capital | Population 3/ | |||
|---|---|---|---|---|---|---|---|
| GDP 1/ | Growth 2/ | GDP 1/ | Growth 2/ | gap 2/ | Stock 1/ | ||
| 1938 | 104.4 | 112.8 | -7.8 | 74.4 | 1.06 | ||
| 1939 | 122.4 | 17.2 | 114.8 | 1.8 | 6.3 | 69.9 | 1.09 |
| 1940 | 115.9 | -5.3 | 117.0 | 1.9 | -1.2 | 66.6 | 1.11 |
| 1941 | 117.7 | 1.6 | 119.2 | 1.9 | -1.5 | 63.7 | 1.14 |
| 1942 | 124.6 | 5.9 | 121.1 | 1.6 | 2.8 | 60.2 | 1.16 |
| 1943 | 127.3 | 2.2 | 122.9 | 1.4 | 3.7 | 56.9 | 1.19 |
| 1944 | 130.0 | 2.1 | 124.6 | 1.4 | 4.6 | 54.2 | 1.22 |
| 1945 | 125.3 | -3.6 | 126.3 | 1.4 | -0.4 | 52.0 | 1.24 |
| 1946 | 137.7 | 9.9 | 128.5 | 1.7 | 7.5 | 51.3 | 1.27 |
| 1947 | 119.7 | -13.1 | 130.9 | 1.9 | -8.5 | 51.2 | 1.30 |
| 1948 | 121.0 | 1.1 | 133.4 | 1.9 | -9.3 | 50.7 | 1.33 |
| 1949 | 141.4 | 16.9 | 136.4 | 2.2 | 3.6 | 50.7 | 1.36 |
| 1950 | 143.0 | 1.1 | 140.7 | 3.1 | 1.5 | 51.2 | 1.40 |
| 1951 | 144.7 | 1.2 | 144.1 | 2.4 | 0.3 | 51.4 | 1.43 |
| 1952 | 142.9 | -1.2 | 147.9 | 2.6 | -3.6 | 52.0 | 1.46 |
| 1953 | 150.2 | 5.1 | 152.3 | 3.0 | -1.4 | 51.8 | 1.50 |
| 1954 | 154.4 | 2.8 | 156.5 | 2.7 | -1.3 | 52.5 | 1.53 |
| 1955 | 164.0 | 6.2 | 161.8 | 3.4 | 1.6 | 53.7 | 1.57 |
| 1956 | 167.9 | 2.4 | 167.6 | 3.6 | 0.4 | 55.8 | 1.61 |
| 1957 | 177.9 | 6.0 | 172.8 | 3.1 | 3.4 | 57.0 | 1.65 |
| 1958 | 189.5 | 6.5 | 177.5 | 2.7 | 7.4 | 59.3 | 1.68 |
| 1959 | 187.7 | -1.0 | 184.1 | 3.7 | 1.9 | 66.8 | 1.71 |
| 1960 | 186.8 | -0.5 | 190.0 | 3.2 | -1.7 | 71.1 | 1.75 |
| 1961 | 199.1 | 6.6 | 198.0 | 4.2 | 0.4 | 78.5 | 1.80 |
| 1962 | 205.0 | 3.0 | 206.9 | 4.5 | -1.5 | 88.8 | 1.85 |
| 1963 | 213.7 | 4.2 | 215.5 | 4.1 | -1.1 | 95.1 | 1.91 |
| 1964 | 222.6 | 4.2 | 223.9 | 3.9 | -0.4 | 100.0 | 1.97 |
| 1965 | 235.4 | 5.8 | 233.4 | 4.2 | 1.3 | 107.0 | 2.03 |
| 1966 | 238.7 | 1.4 | 243.6 | 4.4 | -1.9 | 120.9 | 2.07 |
| 1967 | 259.9 | 8.9 | 257.1 | 5.6 | 0.9 | 137.8 | 2.13 |
| 1968 | 269.0 | 3.5 | 270.7 | 5.3 | -1.1 | 156.4 | 2.18 |
| 1969 | 280.7 | 4.3 | 285.9 | 5.6 | -2.2 | 173.5 | 2.24 |
| 1970 | 295.2 | 5.2 | 301.3 | 5.4 | -2.4 | 191.7 | 2.29 |
| 1971 | 312.2 | 5.8 | 319.9 | 6.2 | -2.5 | 208.5 | 2.36 |
| 1972 | 333.1 | 6.7 | 340.8 | 6.5 | -2.1 | 226.8 | 2.43 |
| 1973 | 358.0 | 7.5 | 365.6 | 7.3 | -1.6 | 248.3 | 2.51 |
| 1974 | 388.5 | 8.5 | 395.2 | 8.1 | -1.3 | 282.3 | 2.60 |
| 1975 | 416.5 | 7.2 | 427.7 | 8.2 | -2.3 | 321.0 | 2.69 |
| 1976 | 446.7 | 7.3 | 459.8 | 7.5 | -2.2 | 352.4 | 2.77 |
| 1977 | 495.7 | 11.0 | 497.2 | 8.1 | 0.3 | 404.5 | 2.86 |
| 1978 | 551.8 | 11.3 | 537.6 | 8.1 | 3.1 | 467.9 | 2.95 |
| 1979 | 614.4 | 11.3 | 579.9 | 7.9 | 6.2 | 547.3 | 3.05 |
| 1980 | 684.8 | 11.5 | 622.6 | 7.4 | 9.8 | 643.4 | 3.15 |
| 1981 | 744.4 | 8.7 | 665.8 | 6.9 | 11.1 | 762.7 | 3.25 |
| 1982 | 737.1 | -1.0 | 707.8 | 6.3 | 2.9 | 903.3 | 3.36 |
| 1983 | 714.9 | -3.0 | 740.3 | 4.6 | -4.5 | 989.8 | 3.47 |
| 1984 | 736.9 | 3.1 | 765.8 | 3.4 | -4.5 | 1,036.0 | 3.58 |
| 1985 | 766.2 | 4.0 | 789.7 | 3.1 | -3.3 | 1,078.9 | 3.68 |
| 1986 | 766.2 | 0.0 | 812.0 | 2.8 | -5.7 | 1,117.9 | 3.78 |
| 1987 | 799.4 | 4.3 | 836.7 | 3.0 | -4.3 | 1,157.6 | 3.89 |
| 1988 | 850.2 | 6.4 | 862.6 | 3.1 | -1.1 | 1,202.9 | 4.00 |
| 1989 | 899.5 | 5.8 | 889.1 | 3.1 | 1.6 | 1,249.5 | 4.11 |
| 1990 | 927.3 | 3.1 | 916.7 | 3.1 | 1.5 | 1,309.3 | 4.22 |
| 1991 | 950.2 | 2.5 | 945.6 | 3.2 | 0.7 | 1,381.8 | 4.33 |
| 1992 | 967.3 | 1.8 | 975.9 | 3.2 | -0.8 | 1,459.0 | 4.45 |
| 1993 | 1,007.4 | 4.1 | 1,003.2 | 2.8 | 0.5 | 1,514.7 | 4.57 |
| 1994 | 1,038.5 | 3.1 | 1,031.1 | 2.8 | 0.8 | 1,569.7 | 4.70 |
| 1995 | 1,087.4 | 4.7 | 1,057.8 | 2.6 | 2.9 | 1,628.7 | 4.83 |
| 1996 | 1,101.2 | 1.3 | 1,084.0 | 2.5 | 1.6 | 1,698.5 | 4.96 |
| 1997 | 1,129.7 | 2.6 | 1,111.0 | 2.5 | 1.7 | 1,761.2 | 5.09 |
| 1998 | 1,125.0 | -0.4 | 1,138.5 | 2.5 | -1.2 | 1,813.8 | 5.22 |
| 1999 | 1,115.9 | -3.0 | 1,166.8 | 2.5 | -4.5 | 1,849.8 | 5.35 |
| 2000 | 1,141.6 | 1,196.0 | 2.5 | -4.6 | 1,869.8 | 5.48 |
In billions of Guaranies of 1982.
In percent.
In millions.
Historical Data on the Production Function
| Actual | Potential | Output | Capital | Population 3/ | |||
|---|---|---|---|---|---|---|---|
| GDP 1/ | Growth 2/ | GDP 1/ | Growth 2/ | gap 2/ | Stock 1/ | ||
| 1938 | 104.4 | 112.8 | -7.8 | 74.4 | 1.06 | ||
| 1939 | 122.4 | 17.2 | 114.8 | 1.8 | 6.3 | 69.9 | 1.09 |
| 1940 | 115.9 | -5.3 | 117.0 | 1.9 | -1.2 | 66.6 | 1.11 |
| 1941 | 117.7 | 1.6 | 119.2 | 1.9 | -1.5 | 63.7 | 1.14 |
| 1942 | 124.6 | 5.9 | 121.1 | 1.6 | 2.8 | 60.2 | 1.16 |
| 1943 | 127.3 | 2.2 | 122.9 | 1.4 | 3.7 | 56.9 | 1.19 |
| 1944 | 130.0 | 2.1 | 124.6 | 1.4 | 4.6 | 54.2 | 1.22 |
| 1945 | 125.3 | -3.6 | 126.3 | 1.4 | -0.4 | 52.0 | 1.24 |
| 1946 | 137.7 | 9.9 | 128.5 | 1.7 | 7.5 | 51.3 | 1.27 |
| 1947 | 119.7 | -13.1 | 130.9 | 1.9 | -8.5 | 51.2 | 1.30 |
| 1948 | 121.0 | 1.1 | 133.4 | 1.9 | -9.3 | 50.7 | 1.33 |
| 1949 | 141.4 | 16.9 | 136.4 | 2.2 | 3.6 | 50.7 | 1.36 |
| 1950 | 143.0 | 1.1 | 140.7 | 3.1 | 1.5 | 51.2 | 1.40 |
| 1951 | 144.7 | 1.2 | 144.1 | 2.4 | 0.3 | 51.4 | 1.43 |
| 1952 | 142.9 | -1.2 | 147.9 | 2.6 | -3.6 | 52.0 | 1.46 |
| 1953 | 150.2 | 5.1 | 152.3 | 3.0 | -1.4 | 51.8 | 1.50 |
| 1954 | 154.4 | 2.8 | 156.5 | 2.7 | -1.3 | 52.5 | 1.53 |
| 1955 | 164.0 | 6.2 | 161.8 | 3.4 | 1.6 | 53.7 | 1.57 |
| 1956 | 167.9 | 2.4 | 167.6 | 3.6 | 0.4 | 55.8 | 1.61 |
| 1957 | 177.9 | 6.0 | 172.8 | 3.1 | 3.4 | 57.0 | 1.65 |
| 1958 | 189.5 | 6.5 | 177.5 | 2.7 | 7.4 | 59.3 | 1.68 |
| 1959 | 187.7 | -1.0 | 184.1 | 3.7 | 1.9 | 66.8 | 1.71 |
| 1960 | 186.8 | -0.5 | 190.0 | 3.2 | -1.7 | 71.1 | 1.75 |
| 1961 | 199.1 | 6.6 | 198.0 | 4.2 | 0.4 | 78.5 | 1.80 |
| 1962 | 205.0 | 3.0 | 206.9 | 4.5 | -1.5 | 88.8 | 1.85 |
| 1963 | 213.7 | 4.2 | 215.5 | 4.1 | -1.1 | 95.1 | 1.91 |
| 1964 | 222.6 | 4.2 | 223.9 | 3.9 | -0.4 | 100.0 | 1.97 |
| 1965 | 235.4 | 5.8 | 233.4 | 4.2 | 1.3 | 107.0 | 2.03 |
| 1966 | 238.7 | 1.4 | 243.6 | 4.4 | -1.9 | 120.9 | 2.07 |
| 1967 | 259.9 | 8.9 | 257.1 | 5.6 | 0.9 | 137.8 | 2.13 |
| 1968 | 269.0 | 3.5 | 270.7 | 5.3 | -1.1 | 156.4 | 2.18 |
| 1969 | 280.7 | 4.3 | 285.9 | 5.6 | -2.2 | 173.5 | 2.24 |
| 1970 | 295.2 | 5.2 | 301.3 | 5.4 | -2.4 | 191.7 | 2.29 |
| 1971 | 312.2 | 5.8 | 319.9 | 6.2 | -2.5 | 208.5 | 2.36 |
| 1972 | 333.1 | 6.7 | 340.8 | 6.5 | -2.1 | 226.8 | 2.43 |
| 1973 | 358.0 | 7.5 | 365.6 | 7.3 | -1.6 | 248.3 | 2.51 |
| 1974 | 388.5 | 8.5 | 395.2 | 8.1 | -1.3 | 282.3 | 2.60 |
| 1975 | 416.5 | 7.2 | 427.7 | 8.2 | -2.3 | 321.0 | 2.69 |
| 1976 | 446.7 | 7.3 | 459.8 | 7.5 | -2.2 | 352.4 | 2.77 |
| 1977 | 495.7 | 11.0 | 497.2 | 8.1 | 0.3 | 404.5 | 2.86 |
| 1978 | 551.8 | 11.3 | 537.6 | 8.1 | 3.1 | 467.9 | 2.95 |
| 1979 | 614.4 | 11.3 | 579.9 | 7.9 | 6.2 | 547.3 | 3.05 |
| 1980 | 684.8 | 11.5 | 622.6 | 7.4 | 9.8 | 643.4 | 3.15 |
| 1981 | 744.4 | 8.7 | 665.8 | 6.9 | 11.1 | 762.7 | 3.25 |
| 1982 | 737.1 | -1.0 | 707.8 | 6.3 | 2.9 | 903.3 | 3.36 |
| 1983 | 714.9 | -3.0 | 740.3 | 4.6 | -4.5 | 989.8 | 3.47 |
| 1984 | 736.9 | 3.1 | 765.8 | 3.4 | -4.5 | 1,036.0 | 3.58 |
| 1985 | 766.2 | 4.0 | 789.7 | 3.1 | -3.3 | 1,078.9 | 3.68 |
| 1986 | 766.2 | 0.0 | 812.0 | 2.8 | -5.7 | 1,117.9 | 3.78 |
| 1987 | 799.4 | 4.3 | 836.7 | 3.0 | -4.3 | 1,157.6 | 3.89 |
| 1988 | 850.2 | 6.4 | 862.6 | 3.1 | -1.1 | 1,202.9 | 4.00 |
| 1989 | 899.5 | 5.8 | 889.1 | 3.1 | 1.6 | 1,249.5 | 4.11 |
| 1990 | 927.3 | 3.1 | 916.7 | 3.1 | 1.5 | 1,309.3 | 4.22 |
| 1991 | 950.2 | 2.5 | 945.6 | 3.2 | 0.7 | 1,381.8 | 4.33 |
| 1992 | 967.3 | 1.8 | 975.9 | 3.2 | -0.8 | 1,459.0 | 4.45 |
| 1993 | 1,007.4 | 4.1 | 1,003.2 | 2.8 | 0.5 | 1,514.7 | 4.57 |
| 1994 | 1,038.5 | 3.1 | 1,031.1 | 2.8 | 0.8 | 1,569.7 | 4.70 |
| 1995 | 1,087.4 | 4.7 | 1,057.8 | 2.6 | 2.9 | 1,628.7 | 4.83 |
| 1996 | 1,101.2 | 1.3 | 1,084.0 | 2.5 | 1.6 | 1,698.5 | 4.96 |
| 1997 | 1,129.7 | 2.6 | 1,111.0 | 2.5 | 1.7 | 1,761.2 | 5.09 |
| 1998 | 1,125.0 | -0.4 | 1,138.5 | 2.5 | -1.2 | 1,813.8 | 5.22 |
| 1999 | 1,115.9 | -3.0 | 1,166.8 | 2.5 | -4.5 | 1,849.8 | 5.35 |
| 2000 | 1,141.6 | 1,196.0 | 2.5 | -4.6 | 1,869.8 | 5.48 |
In billions of Guaranies of 1982.
In percent.
In millions.
Prepared by Benedikt Braumann.
World Bank (1992): Informe Económico de Paraguay.
This approach goes back to the growth accounting literature of the 1960. A recent description can be found in Barro and Sala-i-Martin (1995): Economic Growth, Cambridge University Press, p. 384.
See also the study on the informal sector in Section II.
Part of wages and salaries are remuneration for human capital services. However, this section limits its discussion to only two factors of production.
