Relative productivity levels are used intensively in analyzing cross-country growth, but often based on crude measures and with little information on their reliability. In this paper, we provide a new framework to estimate purchasing power parities and productivity levels with associated standard errors using the country-product-dummy (CPD) method. For a set of OECD countries, we show that productivity levels in manufacturing industries are measured with sizeable error. We also show that cruder productivity measures are often poor proxies for the data-intensive measure presented here. This evidence can be used to deal with the problem of attenuation bias in cross-country regressions.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number
GD-111.