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Aggregate multi-factor productivity: measurement issues in OECD countries

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  • Balázs Egert

Abstract

This paper analyses for 34 OECD countries the extent to which the calculation of aggregate multi-factor productivity (MFP) is sensitive to alternative parameterisations. The starting point is the definition of MFP used in previous work in the OECD’s Economics Department (e.g. Johansson et al. 2013). They include alternative MFP measures, with human capital included or excluded, with different measures of Purchasing Power Parity (PPP) exchange rates, using time-varying capital depreciation rates and different measures of capital stock and labour input (headcount against hours worked). The main result of the paper is that whether or not human capital is included in MFP makes a significant difference for the level and dynamics of MFP. At the same time, MFP measures are less sensitive to other parameters of the calculation.

Suggested Citation

  • Balázs Egert, 2018. "Aggregate multi-factor productivity: measurement issues in OECD countries," EconomiX Working Papers 2018-20, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2018-20
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    References listed on IDEAS

    as
    1. Dan Andrews & Ben Westmore, 2014. "Managerial Capital and Business R&D as Enablers of Productivity Convergence," OECD Economics Department Working Papers 1137, OECD Publishing.
    2. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    3. Balázs Égert, 2007. "Real Convergence, Price Level Convergence and Inflation Differentials in Europe," Working Papers 138, Oesterreichische Nationalbank (Austrian Central Bank).
    4. Åsa Johansson & Yvan Guillemette & Fabrice Murtin & David Turner & Giuseppe Nicoletti & Christine de la Maisonneuve & Philip Bagnoli & Guillaume Bousquet & Francesca Spinelli, 2013. "Long-Term Growth Scenarios," OECD Economics Department Working Papers 1000, OECD Publishing.
    5. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    6. Dan Andrews & Federico Cingano, 2014. "Public policy and resource allocation: evidence from firms in Oecd countries [‘Joseph Schumpeter Lecture. Appropriate growth policy: a unifying framework]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 29(78), pages 253-296.
    7. Balázs Égert, 2007. "Real Convergence, Price Level Convergence and Inflation in Europe," Working Papers 267, Bruegel.
    8. Jakob B. Madsen, 2014. "Human Capital and the World Technology Frontier," The Review of Economics and Statistics, MIT Press, vol. 96(4), pages 676-692, October.
    9. Ben Westmore, 2013. "R&D, Patenting and Growth: The Role of Public Policy," OECD Economics Department Working Papers 1047, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    multi-factor productivity; measurement; human capital; OECD;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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