Jeremy Greenwood And Per Krusell, "Growth Accounting With Investment-specific Technological Progress: A Discussion Of Two Approaches" A Rejoinder

The May 2007 issue of the Journal of Monetary Economics published a paper of the author entitled 'Investment-Specific Technological Progress and Growth Accounting' which critiqued the work of Greenwood, Hercowitz and Krusell. The author argued that the Greenwood-Hercowitz-Krusell (GHK) model is a special case of a two-sector, neoclassical growth model with differing rates of technical progress in the two sectors; that a version of Jorgensonian growth accounting can be constructed for this two-sector model and hence for the GHK model; and that there is therefore a mapping between the growth accounting concepts of Total Factor Productivity (TFP) growth in each of the two sectors, and GHK's concepts of investment specific and neutral technological progress.