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 - - 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.:
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- Richard Rogerson & Diego Restuccia, 2004. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," 2004 Meeting Papers, Society for Economic Dynamics 69, Society for Economic Dynamics.
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