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A General Equilibrium Analysis of the Evolution of the Canadian Service Productivity

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  • Pierre Mohnen
  • Thijs Ten Raa

Abstract

This paper measures factor productivities (and hence total factor productivity growth) directly on the basis of the fundamentals of the economy (endowments, preferences and technology), without recourse to market prices. The factor productivities are the Lagrange multipliers of a linear program maximizing domestic final demand subject to material balances, endowment constraints, and a balance of payments constraint. The model is applied to the data of the Canadian economy from 1962 to 1991. The commonly held view that services are dragging down the whole economy does not stand the facts. Dans cet article, nous mesurons les productivités factorielles (et dès lors la croissance de la productivité totale des facteurs) à partir des principes essentiels d'une économie (les ressources, les préférences et la technologie) sans avoir recours aux prix du marché. Les productivités factorielles sont les multiplicateurs de Lagrange d'un programme linéaire qui maximise la demande finale domestique sous les contraintes sectorielles, les contraintes de ressources et la contrainte de la balance commerciale. Nous appliquons le modèle aux données de l'économie canadienne de 1962 à 1991. Les données ne concordent pas avec l'hypothèse traditionnelle selon laquelle les services ralentissent la croissance de la productivité.

Suggested Citation

  • Pierre Mohnen & Thijs Ten Raa, 1997. "A General Equilibrium Analysis of the Evolution of the Canadian Service Productivity," CIRANO Working Papers 97s-37, CIRANO.
    • Handle: RePEc:cir:cirwor:97s-37
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    File URL: https://cirano.qc.ca/files/publications/97s-37.pdf
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    References listed on IDEAS

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    1. repec:sae:niesru:v:162:y::i:1:p:99-111 is not listed on IDEAS
    2. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    3. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    4. Thijs ten Raa & Pierre Mohnen, 2009. "Neoclassical Growth Accounting and Frontier Analysis: A Synthesis," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 19, pages 347-370, World Scientific Publishing Co. Pte. Ltd..
    5. de Jong, G., 1996. "Canada's Post-War Manufacturing Performance: A Comparison with the United States," Papers 32, Groningen State, Institute of Economic Research-.
    6. Hulten, Charles R, 1979. "On the "Importance" of Productivity Change," American Economic Review, American Economic Association, vol. 69(1), pages 126-136, March.
    7. De Jong, Gjalt, 1996. "Canada's Post-war Manufacturing Performance: A Comparison with the United States," GGDC Research Memorandum 199632, Groningen Growth and Development Centre, University of Groningen.
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    Citations

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    Cited by:

    1. Thijs ten Raa & Pierre Mohnen, 2009. "Competition and Performance: The Different Roles of Capital and Labor," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 20, pages 371-388, World Scientific Publishing Co. Pte. Ltd..
    2. Bonatti, Luigi & Felice, Giulia, 2008. "Endogenous growth and changing sectoral composition in advanced economies," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 109-131, June.

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    More about this item

    Keywords

    Productivity; linear programming; Canada; Productivité; programmation linéaire; Canada;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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