Using Investment Data to Assess the Importance of Price Mismeasurement
AbstractThis paper presents a new approach to assess the role of price mismeasurement in the productivity slowdown. I invert the firm's investment decision to identify the embodied and disembodied components of productivity growth. With a Cobb-Douglas production function, output price mismeasurement only should affect the latter. Contrary to the mismeasurement hypothesis, I find that in the Post-War period, disembodied productivity grew faster in the hard-to-measure than in the non-manufacturing easy-to-measure sectors, and that disembodied productivity slowed down less in the hard-to-measure than in the easy-to-measure sectors since the 70's. These results hold a fortiori when capital and labor are complements.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10627.
Date of creation: Jul 2004
Date of revision:
Publication status: published as Comin, Diego A. "Using Investment Data To Access The Importance Of Price Mismeasurement." B.E. Journal of Macroeconomics, 2006, v6(1), Article 7.
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Other versions of this item:
- Comin Diego A, 2006. "Using Investment Data to Assess the Importance of Price Mismeasurement," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-42, April.
- Diego Comin, 2003. "Using Investment Data to Assess the Importance of Price Mismeasurement," Macroeconomics 0306006, EconWPA.
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- D9 - Microeconomics - - Intertemporal Choice
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-18 (All new papers)
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