Multifactorial productivity and economic growth in Venezuela

In this paper I use the growth accounting methodology to analyze the sources of economic growth of Venezuela during 19502002. The empirical results show that even when net capital stock grew at a rate above 3.8% and employment at 3.6%, GDP only grew at an annual rate of 3.3%. Apossible explanation of this phenomenon is that multifactor productivity showed a decreasing trend after mid 1960s. Multifactor productivity growth rate oscillated between 0.05% and -0.48%) for the entire period (0.89% and -1.31% when human capital was included). In other words, the sources of the economic growth experienced during 1950 and 2002 are found in the accelerated process of factors accumulation; nevertheless, the GDP trend change observed after 1980 could have been produced by the fall in net investment as a result of the increase in the price of capital and its consequences on total factor productivity.