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Federal Reserve Bank of Dallas
Globalization Institute Working Papers
The quantitative role of capital-goods imports in U.S. growth
Michele Cavallo
Anthony E. Landry
Abstract

Over the last 40 years, an increasing share of U.S. aggregate E&S investment expenditure has been allocated to capital-goods imports. While capital-goods imports were only 3.5 percent of E&S investment in 1967, by 2008 their share had risen tenfold to 36 percent. The goal of this paper is to measure the contribution of capital-goods imports to growth in U.S. output per hour using a simple growth accounting exercise. We find that capital-goods imports have contributed 20 to 30 percent to growth in U.S. output per hour between 1967 and 2008. More importantly, we find that capital-goods imports have been an increasing source of growth for the US economy: the average contribution of capital-goods imports to growth in U.S .output per hour has increased noticeably since 1967.


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Michele Cavallo & Anthony E. Landry, The quantitative role of capital-goods imports in U.S. growth, Federal Reserve Bank of Dallas, Globalization Institute Working Papers 47, 2010.
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Note: Published as: Cavallo, Michele and Anthony Landry (2010), "The Quantitative Role of Capital-Goods Imports in U.S. Growth," American Economic Review 100 (2): 78-82.
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