Capital goods, measured TFP and growth: The case of Spain Articles uri icon

publication date

  • April 2016

start page

  • 19

end page

  • 39


  • 83

International Standard Serial Number (ISSN)

  • 0014-2921

Electronic International Standard Serial Number (EISSN)

  • 1873-572X


  • The effect of investing in equipment and/or structures on TFP and long run growth is investigated here. We argue that economies can grow in spite of stagnant TFP if the investment rate is inefficiently high. We study the case of Spain where real GDP per worker grew at 2.74 percent annually and TFP was stagnant during 1996-2007. We show that low Spanish TFP is due to low ISTC and an inefficiently high investment in residential structures. We quantify the effect of the housing boom of the 2000s, the total cost of subsidies to residential structures in terms of TFP and income growth. (C) 2016 Elsevier B.V. All rights reserved.


  • spain; total factor productivity; growth accounting; investment specific technical change; applied general equilibrium; technological-change; wealth distribution; business-cycle; united-states; productivity; investment; japan