Abstract

This paper deals with the change of some aggregate structural indicators in Chile over the 20-year period 1996-2015. We first produce an accounting growth decomposition to assess the changes in the contribution of capital productivity, capital intensity and labour participation to the growth rate of output per capita as well as the growth rate of labour income participation in national income. We then combine an accounting growth decomposition with a standard production function growth accounting to assess the contribution of both capital productivity and capital intensity to total factor productivity (TFP). To complement the latter, we produce optimal estimates of incremental capital productivity and incremental income elasticity to capital by means of a linear programming exercise. Our main conclusion is that capital intensity, rather than capital productivity or labour participation, has been the main growth contributor. TFP has contributed in a decreasing way from positive to negative over our sub-periods, so adding to and subtracting from GDP growth over time, with the main positive contributor to TFP growth systematically being a proportion of capital intensity.

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