This paper analyzes the experience of economic growth in Peru during the last five decades. It describes its principal characteristics, explains the changes along the period and predicts its future path. The methodological approach consists in a combination of accounting and econometric techniques, both based in comparisons between countries and periods of time. The study discovers that the most important turning points of the economic growth were caused by changes in the productivity of all inputs, instead of the simple accumulation of capital. Specifically, the paper finds out that the recover of the economic growth in Peru during the 1990’s was caused by the process of structural reforms and stabilization and lasts until now. The future growth of the economy depends on the continuation and deepness of this process.

This paper analyzes the experience of economic growth in Peru during the last five decades. It describes its principal characteristics, explains the changes along the period and predicts its future path. The methodological approach consists in a combination of accounting and econometric techniques, both based in comparisons between countries and periods of time. The study discovers that the most important turning points of the economic growth were caused by changes in the productivity of all inputs, instead of the simple accumulation of capital. Specifically, the paper finds out that the recover of the economic growth in Peru during the 1990’s was caused by the process of structural reforms and stabilization and lasts until now. The future growth of the economy depends on the continuation and deepness of this process.

This paper analyzes the experience of economic growth in Peru during the last five decades. It describes its principal characteristics, explains the changes along the period and predicts its future path. The methodological approach consists in a combination of accounting and econometric techniques, both based in comparisons between countries and periods of time. The study discovers that the most important turning points of the economic growth were caused by changes in the productivity of all inputs, instead of the simple accumulation of capital. Specifically, the paper finds out that the recover of the economic growth in Peru during the 1990’s was caused by the process of structural reforms and stabilization and lasts until now. The future growth of the economy depends on the continuation and deepness of this process.

Este capítulo intenta situar la informalidad en el proceso de desarrollo y crecimiento económico. En primer lugar, se presentan los principales enfoques que abordan la informalidad, como consecuencia y causa del subdesarrollo. Se revisa la evidencia empírica sobre los determinantes de la informalidad y se la caracteriza como el resultado de una baja productividad y una deficiente gobernanza. Estos resultados empíricos se aplican para entender la gran incidencia de la informalidad en el Perú. En segundo lugar, se discute un modelo que estudia la evolución conjunta de la informalidad, el crecimiento económico, y la migración laboral. El modelo permite distinguir entre una informalidad rudimentaria de subsistencia y una informalidad insertada en la economía moderna. Finalmente, se usa el modelo para proyectar unos escenarios posibles del tamaño y tipos de la informalidad en el Per...

This is the background paper for the productivity extension of the World Bank’s Long-Term Growth Model (LTGM). Based on an extensive literature review, the paper identifies the main determinants of economic productivity as innovation, education, market efficiency, infrastructure and institutions. Based on underlying proxies, the paper constructs indexes representing each of the main categories of productivity determinants and, combining them through principal component analysis, obtains an overall determinant index. This is done for every year in the three decades spanning 1985-2015 and for more than 100 countries. In parallel, the paper presents a measure of total factor productivity (TFP), largely obtained from the Penn World Table, and assesses the pattern of productivity growth across regions and income groups over the same sample. The paper then examines the relationship between t...

This is the background paper for the productivity extension of the World Bank’s Long-Term Growth Model (LTGM). Based on an extensive literature review, the paper identifies the main determinants of economic productivity as innovation, education, market efficiency, infrastructure, and institutions. Based on underlying proxies, the paper constructs indexes representing each of the main categories of productivity determinants and, combining them through principal component analysis, obtains an overall determinant index. This is done for every year in the three decades spanning 1985-2015 and for more than 100 countries. In parallel, the paper presents a measure of total factor productivity (TFP), largely obtained from the Penn World Table, and assesses the pattern of productivity growth across regions and income groups over the same sample. The paper ...

This is the background paper for the productivity extension of the World Bank’s Long-Term Growth Model (LTGM). Based on an extensive literature review, the paper identifies the main determinants of economic productivity as innovation, education, market efficiency, infrastructure, and institutions. Based on underlying proxies, the paper constructs indexes representing each of the main categories of productivity determinants and, combining them through principal component analysis, obtains an overall determinant index. This is done for every year in the three decades spanning 1985-2015 and for more than 100 countries. In parallel, the paper presents a measure of total factor productivity (TFP), largely obtained from the Penn World Table, and assesses the pattern of productivity growth across regions and income groups over the same sample. The paper ...

This paper presents an analytical framework that captures the informational problems and tradeoffs that policy makers face when choosing between public goods (e.g., infrastructure) and industrial policies (e.g., firm or sector-specific subsidies). The paper first provides a discussion of the literature on industrial policies. It then presents an illustrative model, where the economy consists of a set of firms that vary by productivity and a government that can support firms through general or targeted expenditures. The paper examines the cases of full and asymmetric information on firm productivity. Working under full information, it describes the first-best allocation of government resources among firms according to their productivity. It then introduces uncertainty by restricting information regarding firm productivity to be private to the firm. The paper develops an optimal contract (...

This paper presents an analytical framework that captures the informational problems and tradeoffs that policy makers face when choosing between public goods (e.g., infrastructure) and industrial policies (e.g., firm or sector-specific subsidies). The paper first provides a discussion of the literature on industrial policies. It then presents an illustrative model, where the economy consists of a set of firms that vary by productivity and a government that can support firms through general or targeted expenditures. The paper examines the cases of full and asymmetric information on firm productivity. Working under full information, it describes the first-best allocation of government resources among firms according to their productivity. It then introduces uncertainty by restricting information regarding firm productivity to be private to the firm. The paper develops an optimal contract (...

This paper presents an analytical framework that captures the informational problems and tradeoffs that policy makers face when choosing between public goods (e.g., infrastructure) and industrial policies (e.g., firm or sector-specific subsidies). The paper first provides a discussion of the literature on industrial policies. It then presents an illustrative model, where the economy consists of a set of firms that vary by productivity and a government that can support firms through general or targeted expenditures. The paper examines the cases of full and asymmetric information on firm productivity. Working under full information, it describes the first-best allocation of government resources among firms according to their productivity. It then introduces uncertainty by restricting information regarding firm productivity to be private to the firm. The paper develops an optimal contract (...

El crecimiento económico es constantemente evaluado como variable fundamental del desarrollo económico. A medianos de la segunda década de este siglo, Perú enfrenta un episodio de desaceleración con tasas de crecimiento anual cercanas a 3 por ciento, lo que contrasta con el súper ciclo de crecimiento económico de los últimos 27 años en los cuales el crecimiento anual fue superior a cinco por ciento. Este reciente bajo crecimiento parece una regularidad más estructural de la economía peruana, pues desde una perspectiva de largo plazo los fundamentos de la economía peruana solo han permitido generar un lento crecimiento, empujada en gran medida por el crecimiento de los factores como capital y trabajo, y en menor medida por la eficiencia en el uso de estos factores (productividad), todo esto en el contexto de una serie de choques externos que ha golpeado periódicamente a los f...