[STATA] Dev. accounting

*clear all *macro drop _all *set more off set scheme gg_tableau

use "pwt_10_dload_02032021.dta", clear * Merge with natural resources share merge 1:1 year countrycode using "natural_resources.dta" drop if _merge==2

keep countrycode year rgdpo emp avh cn cgdpo hc ctfp natural_res

describe

keep if year==2007 | year==2017

sum

list countrycode year rgdpo emp avh hc, sep(16)

* Physical Capital share local alpha=0.33 * Relevant year of study local year_base=2017

* Adjust real GDP by natural resources (assuming one uses the same deflator for GDP and nat_res) replace rgdpo = (1-natural_res/100)*rgdpo

* Adjust GDP at current prices by natural resources replace cgdpo = (1-natural_res/100)*cgdpo

gen output_per_worker = ln(rgdpo/(emp*avh))

gen capital_output_ratio = ln(cn/cgdpo)*`alpha'/(1-`alpha')

gen human_capital = ln(hc)

gen tfp_resid = output_per_worker - capital_output_ratio - human_capital

list countrycode year output_per_worker capital_output_ratio human_capital tfp_resid, sep(16)

foreach i in output_per_worker capital_output_ratio human_capital tfp_resid { * Remove logs replace `i' = exp(`i') * Identify the value of each variable for the US gen output_ = `i' if countrycode == "USA" * Compute the cross-country average in each year bys year: egen output_norm = mean(output_) * Compute the relative values for each variable gen norm_`i' = `i'/output_norm drop output_ output_norm }

list countrycode year norm_output_per_worker norm_capital_output_ratio norm_human_capital norm_tfp_resid, sep(16)

gen overall_diff = 1/norm_output_per_worker

gen contrib_capital = 1/norm_capital_output_ratio

gen contrib_labor = 1/norm_human_capital

gen contrib_TFP = 1/norm_tfp_resid

list countrycode year overall_diff contrib_capital contrib_labor contrib_TFP, sep(16)

gen share_due_to_TFP = contrib_TFP/(contrib_TFP + (contrib_labor*contrib_capital))

list countrycode year share_due_to_TFP, sep(16)

replace share_due_to_TFP =. if countrycode=="USA"

corr share_due_to_TFP norm_output_per_worker if year==`year_base' local corr0: display %5.2f r(rho) reg share_due_to_TFP norm_output_per_worker if year==`year_base' local std0: display %5.2f _b[norm_output_per_worker]/_se[norm_output_per_worker]

#tw sc share_due_to_TFP norm_output_per_worker tw (scatter share_due_to_TFP norm_output_per_worker if year==`year_base', msize(small) mlabel(countrycode) mlabsize(vsmall) mcolor(pink) mlabcolor(black) mlabposition(6)), xscale(log) xticks(0.015 0.031 0.0625 0.125 0.25 0.5 1 2) xlabel(0.015 "1/64" 0.031 "1/32" 0.0625 "1/16" 0.125 "1/8" 0.25 "1/4" 0.5 "1/2" 1 "1" 2 "2") xtitle("Output per worker `year_base', PPP current 2017 US$ (USA=1)") ytitle("Share due to TFP") legend(off) graphregion(margin(right) fcolor(white) lcolor(white)) plotregion(margin(medlarge)) note(Correlation = `corr0' ; t-stat = `std0', position(7) ring(0)) legend(off)

tw (scatter norm_tfp_resid norm_output_per_worker if year==`year_base') (lfit norm_tfp_resid norm_output_per_worker if year==`year_base'), xtitle("Output per worker `year_base', PPP current 2017 US$") ytitle("Total Factor Productivity") legend(off)

tw (scatter norm_capital_output_ratio norm_output_per_worker if year==`year_base') (lfit norm_capital_output_ratio norm_output_per_worker if year==`year_base'), xtitle("Output per worker `year_base', PPP current 2017 US$") ytitle("Capital-output ratio") legend(off)

tw (scatter norm_human_capital norm_output_per_worker if year==`year_base') (lfit norm_human_capital norm_output_per_worker if year==`year_base'), xtitle("Output per worker `year_base', PPP current 2017 US$") ytitle("Human capital") legend(off)

bys year: egen median_contrib_tfp = median(share_due_to_TFP)

list countrycode year share_due_to_TFP median_contrib_tfp

tw (scatter median_contrib_tfp year if year>=1970), xtitle("year") ytitle("Median contribution of TFP") legend(off) graphregion(margin(right) fcolor(white) lcolor(white)) plotregion(margin(medlarge))

gen contrib_cTFP = 1/ctfp gen share_due_to_cTFP = contrib_cTFP/overall_diff bys year: egen median_contrib_ctfp = median(share_due_to_cTFP)

list countrycode year share_due_to_TFP median_contrib_tfp median_contrib_ctfp

tw (scatter median_contrib_tfp year if year>=1970) (scatter median_contrib_ctfp year if year>=1970)

gen share_due_to_hcap = contrib_labor/(contrib_labor+contrib_capital)*(1-share_due_to_TFP) bys year: egen median_contrib_hcap = median(share_due_to_hcap)

list countrycode year share_due_to_hcap median_contrib_hcap contrib_labor

*corr share_due_to_hcap norm_output_per_worker if year==`year_base' *local corr0: display %5.4f r(rho) *reg share_due_to_hcap norm_output_per_worker if year==`year_base' *mat V=e(V) *local std0: display %5.4f _b[norm_output_per_worker]/_se[norm_output_per_worker] *local year_base=2017

*tw (scatter share_due_to_hcap norm_output_per_worker if year==`year_base', msize(small) mlabel(countrycode) mlabsize(vsmall) mcolor(pink) mlabcolor(black) mlabposition(6)), xscale(log) xticks(0.015 0.031 0.0625 0.125 0.25 0.5 1 2) xlabel(0.015 "1/64" 0.031 "1/32" 0.0625 "1/16" 0.125 "1/8" 0.25 "1/4" 0.5 "1/2" 1 "1" 2 "2") xtitle("Output per worker `year_base', PPP current 2017 US$ (USA=1)") ytitle("Share due to Human Capital") legend(off) graphregion(margin(right) fcolor(white) lcolor(white)) plotregion(margin(medlarge)) note(Correlation=`corr0' t-stat=`std0', position(7) ring(0)) legend(off)

gen share_due_to_cap = contrib_capital/(contrib_capital+contrib_labor)*(1-share_due_to_TFP) bys year: egen median_contrib_cap=median(share_due_to_cap)

list countrycode year share_due_to_cap median_contrib_cap contrib_capital

*corr share_due_to_cap norm_output_per_worker if year==`year_base' *local corr0: display %5.4f r(rho) *reg share_due_to_cap norm_output_per_worker if year==`year_base' *mat V=e(V) *local std0: display %5.4f _b[norm_output_per_worker]/_se[norm_output_per_worker]

*tw (scatter share_due_to_cap norm_output_per_worker if year==`year_base', msize(small) mlabel(countrycode) mlabsize(vsmall) mcolor(pink) mlabcolor(black) mlabposition(6)), xscale(log) xticks(0.015 0.031 0.0625 0.125 0.25 0.5 1 2) xlabel(0.015 "1/64" 0.031 "1/32" 0.0625 "1/16" 0.125 "1/8" 0.25 "1/4" 0.5 "1/2" 1 "1" 2 "2") xtitle("Output per worker `year_base', PPP current 2017 US$ (USA=1)") ytitle("Share due to Physical Capital") legend(off) graphregion(margin(right) fcolor(white) lcolor(white)) plotregion(margin(medlarge)) note(Correlation=`corr0' t-stat=`std0', position(7) ring(0)) legend(off)

*tw (scatter median_contrib_tfp year if year>1970) (scatter median_contrib_cap year if year>1970) (scatter median_contrib_hcap year if year>1970), xtitle("year") ytitle("Median contribution of TFP") legend(label(1 "TFP") label(2 "Physical Capital") label( 3 "Human Capital")) graphregion(margin(right) fcolor(white) lcolor(white)) plotregion(margin(medlarge))

list countrycode year median_contrib_tfp median_contrib_cap median_contrib_hcap

preserve

keep if year==2017 foreach i in output_per_worker capital_output_ratio human_capital{ replace `i'=ln(`i') su `i',d local var_`i'=r(Var) }

g output_factor=human_capital+capital_output_ratio su output_factor,d local var_output_factor=r(Var)

cap drop success* gen successcap=`var_capital_output_ratio'/`var_output_per_worker' su successcap

gen successhcap=`var_human_capital'/`var_output_per_worker' su successhcap

gen successoutput=`var_output_factor'/`var_output_per_worker' su successoutput

restore