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Does deflation method matter for productivity measures?

Author

Listed:
  • G. Garau
  • P. Lecca
  • L. Schirru

Abstract

In this paper, we argue against the use the double deflation method to produce an equilibrating system of account at a constant price. In fact, by relaxing such a condition, by means of the single deflation method, we obtain a measure of purchasing power transfer that can be decomposed in productivity and market distortion. Results are presented for the evolution of the Italian economy for the periods 1995-2002

Suggested Citation

  • G. Garau & P. Lecca & L. Schirru, 2009. "Does deflation method matter for productivity measures?," Working Paper CRENoS 200901, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:200901
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    References listed on IDEAS

    as
    1. Devicienti, Francesco & Maida, Agata & Pacelli, Lia, 2008. "The resurrection of the Italian wage curve," Economics Letters, Elsevier, vol. 98(3), pages 335-341, March.
    2. Gabrielle Antille & Emilio Fontela, 2003. "The Terms of Trade and the International Transfers of Productivity Gains," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 3-19, March.
    3. repec:bla:revinw:v:40:y:1994:i:3:p:303-16 is not listed on IDEAS
    4. Andre Babeau, 1978. "The Application Of The Constant Price Method For Evaluating The Transfer Related To Inflation: The Case Of French Households," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 24(4), pages 391-414, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    national account; prices index; total factor productivity; input output;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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