Measurement Issues and International Comparisons of Output and Productivity Growth
AbstractSince the mid-1990s the average growth rates of real GDP and labour productivity in the European Union have fallen behind those in the United States. This development has led to questions about the potential contribution of the differences in measurement methodologies to GDP and productivity growth between the EU and the US. This paper outlines the issues regarding one of the measurement differences between the US and EU, that of using quality-adjusted or hedonic price indices for high technology sectors. We also estimate their contribution to the observed output and productivity differentials. We find that differences in measurement of high technology sectors cannot account for the widening productivity growth difference between the EU and the US. These measurement differences are estimated to have contributed between one and three tenths of a percentage point to differences in growth rates. Ireland proves to be an exception from this general finding however. The application of hedonic price indices for Ireland resulted in an increase of approximately 1.3 per cent in the growth rates of both GDP and labour productivity. This can be explained by the much higher relative importance of high-technology sectors in the Irish economy relative to the rest of the EU. Adjustments to the measurement of these sectors therefore have a larger effect on economy-wide measures of output and productivity.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10007.
Date of creation: 2006
Date of revision:
Productivity growth; hedonic index; high-technology sectors;
Find related papers by JEL classification:
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bart Hobijn, 2001. "Is equipment price deflation a statistical artifact?," Staff Reports 139, Federal Reserve Bank of New York.
- McQuinn, Kieran & Whelan, Karl, 2006.
"Prospects for Growth in the Euro Area,"
Research Technical Papers
12/RT/06, Central Bank of Ireland.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.