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Difficulties Assessing Multifactor Productivity for Canada

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  • Michael J. Harper
  • Alice O. Nakamura
  • Lu Zhang

Abstract

In 2011, Canada's business sector multifactor productivity (MFP) index, as estimated by Statistics Canada, was below that for 1977, a third of a century earlier. Over these years, public policies were enacted to try to improve Canada's productivity. Yet the nation's MFP continued to fall, relative to both the past and Canada's main trading partners. Policymakers and business decision makers need to know whether Canada's MFP statistics accurately reflect the nation's productivity. We argue that they do not.

Suggested Citation

  • Michael J. Harper & Alice O. Nakamura & Lu Zhang, 2012. "Difficulties Assessing Multifactor Productivity for Canada," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 76-84, Fall.
    • Handle: RePEc:sls:ipmsls:v:24:y:2012:7
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    File URL: http://www.csls.ca/ipm/24/IPM-24-Harper.pdf
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    References listed on IDEAS

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    1. Paul Boothe & Richard Roy, 2008. "Business Sector Productivity in Canada: What Do We Know?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 3-13, Spring.
    2. Baldwin, John R. Gu, Wulong, 2007. "Multifactor Productivity in Canada: An Evaluation of Alternative Methods of Estimating Capital Services," The Canadian Productivity Review 2007009e, Statistics Canada, Economic Analysis Division.
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    6. Don Drummond, 2006. "The Economists' Manifesto for Curing Ailing Canadian Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 13, pages 21-26, Fall.
    7. W. Erwin Diewert & Emily Yu, 2012. "New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 27-48, Fall.
    8. W. Erwin Diewert, 1980. "Aggregation Problems in the Measurement of Capital," NBER Chapters, in: The Measurement of Capital, pages 433-538, National Bureau of Economic Research, Inc.
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    10. Usher, Dan (ed.), 1980. "The Measurement of Capital," National Bureau of Economic Research Books, University of Chicago Press, number 9780226843001, October.
    11. W. Erwin Diewert, 2012. "Rejoinder to Gu on "Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada"," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 63-72, Fall.
    12. W. Erwin Diewert, 2005. "Issues in the Measurement of Capital Services, Depreciation, Asset Price Changes, and Interest Rates," NBER Chapters, in: Measuring Capital in the New Economy, pages 479-556, National Bureau of Economic Research, Inc.
    13. Wulong Gu, 2012. "Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 49-62, Fall.
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    Cited by:

    1. Don Drummond & Annette Ryan & Michael R. Veall, 2013. "Improving Canada's Productivity Performance: The Potential Contribution of Firm-level Productivity Research," International Productivity Monitor, Centre for the Study of Living Standards, vol. 26, pages 86-93, Fall.

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