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Does deflation method matter for productivity measures?

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  • G. Garau

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  • 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

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200901.

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Date of creation: 2009
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Handle: RePEc:cns:cnscwp:200901

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Keywords: national account; prices index; total factor productivity; input output;

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  1. Francesco Devicienti & Agata Maida & Lia Pacelli, 2006. "The Resurrection of the Italian Wage Curve," LABORatorio R. Revelli Working Papers Series 52, LABORatorio R. Revelli, Centre for Employment Studies.
  2. Babeau, Andre, 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.
  3. 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.
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