Are production factors allocated efficiently across countries? To differentiate misallocation from factor intensity differences, we provide a new methodology to estimate output shares of natural resources based solely on current rent flows data. With this methodology, we construct a new dataset of estimates for the output shares of natural resources for a large panel of countries. In sharp contrast with Caselli and Feyrer (2007), we find a significant and persistent degree of misallocation of physical capital. We also find a remarkable movement toward efficiency during the last 35 years, associated with the elimination of interventionist policies and driven by domestic accumulation.
Monge-Naranjo, Alexander, Juan M. Sánchez, and Raül Santaeulàlia-Llopis.
"Natural Resources and Global Misallocation."
American Economic Journal: Macroeconomics,
Investment; Capital; Intangible Capital; Capacity
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Renewable Resources and Conservation: Demand and Supply; Prices
Nonrenewable Resources and Conservation: Demand and Supply; Prices
Exhaustible Resources and Economic Development