Aggregate Productivity Loss and the Theil Index of Inequality
AbstractThis paper suggests that the difference in the Theil indices of inequality between two economies approximately measures the relative loss of aggregate productivity caused by distortions in labor allocation. Moreover, the Theil index itself can be interpreted approximately as the possible maximum loss of aggregate productivity caused by these distortions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 7407.
Date of creation: 01 Mar 2008
Date of revision:
inequality; marginal productivity theory; misallocation; productivity; Theil index;
Find related papers by JEL classification:
- E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-08 (All new papers)
- NEP-EFF-2008-03-08 (Efficiency & Productivity)
- NEP-LAB-2008-03-08 (Labour Economics)
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.:
- Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, June.
- Frank A Cowell, 2003. "Theil, Inequality and the Structure of Income Distribution," STICERD - Distributional Analysis Research Programme Papers 67, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
- Diego Restuccia & Richard Rogerson, 2008.
"Policy Distortions and Aggregate Productivity with Heterogeneous Plants,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
- Richard Rogerson & Diego Restuccia, 2004. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," 2004 Meeting Papers 69, Society for Economic Dynamics.
- Diego Restuccia & Richard Rogerson, 2008. "Code for "Policy Distortions and Aggregate Productivity with Heterogeneous Plants"," Computer Codes 07-48, Review of Economic Dynamics.
- Diego Restuccia & Richard Rogerson, 2007. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Working Papers tecipa-283, University of Toronto, Department of Economics.
- Diego Restuccia & Richard Rogerson, 2007. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," NBER Working Papers 13018, National Bureau of Economic Research, Inc.
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