Abstract

LIARD-MURIENTE, Carlos F. Vertical integration and Productivity: The intensification of capital in Puerto Rico during the decades of 1960-1970. rev. econ. Caribe [online]. 2012, n.9, pp.79-106. ISSN 2011-2106.

This article aims to use the technique of vertical integration as an alternative to traditional productivity measures based on input-output methodology. Leontief scheme suffers certain limitations, which are based on the hypothesis that the technical coefficients are constant. Technical parameters may vary because of technological change, which acts independently of the technical coefficients. That is why the factor "time" plays an important role while in the case of vertical integration, without confronting this problem, any change, either by economies of scale or technological progress, only causes a change in the coefficient vertically integrated, without altering the structure of the system. The article uses the economy of Puerto Rico as applied study. We derive direct and indirect requirements of capital and labor respectively, and the maximum characteristic values (eigenvalues), using the technical coefficient matrices and vectors for use in the economy of Puerto Rico.

Keywords : Productivity; vertical integration; input-output; capital intensification; Puerto Rico.

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