Sources of growth : a study of seven Latin American economies

This study refines the sources-of-growth method, quantifying the data for traditional sources of growth while also providing some new empirical tools for measuring the roles of other factors, such as economic sectors. The study examines growth in seven Latin American countries -- Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela -- from 1940 to 1985, comparing the countries both with each other and with developed countries. Policy implications are presented in conclusion. The quality of labor was an important factor of growth in the seven countries, indicating the importance of government investment in education. Capital, on the other hand, though accounting for 45.6% of output growth, did so because of its quantity rather than quality, which actually showed negative growth, suggesting the need for fiscal and regulatory policies to enhance capital market efficiency. Moreover, the relatively poor performance of the public sector suggests a partial movement of capital from the public to the private sector.