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Can Measurement Error Explain the Productivity Paradox?

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Author Info
Diewert, W.E.
Fox, K.J.

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Abstract

While it is widely acknowledge that enormous productivity gains have been achieved through the use of modern technology such as computers, measured productivity growth has been lower in industrialized countries in the last 25 years compared to the previous 50 years. Many authors have argued that measurement error cannot possibly explain this productivity paradox. We give several reasons why it can, including an explanation for the rapid productivity slowdown in the early 1970s, and the lack of a subsequent recovery of measured productivity growth.

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Publisher Info
Paper provided by UBC Department of Economics in its series UBC Departmental Archives with number 98-04.

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Length: 31 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:ubc:bricol:98-04

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Related research
Keywords: PRODUCTIVITY;

Other versions of this item:

Find related papers by JEL classification:
C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting

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  1. Denis Lawrence & W. Diewert & Kevin Fox, 2006. "The contributions of productivity, price changes and firm size to profitability," Journal of Productivity Analysis, Springer, vol. 26(1), pages 1-13, August. [Downloadable!] (restricted)
  2. Frank T. Denton, 2007. "On the Sensitivity of Aggregate Productivity Growth Rates to Noisy Measurement," Social and Economic Dimensions of an Aging Population Research Papers 192, McMaster University. [Downloadable!]
  3. W A Razzak, 2004. "Towards Building A New Consensus About New Zealand’s Productivity," GE, Growth, Math methods 0405002, EconWPA. [Downloadable!]
  4. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Theodore M. Crone & Leonard I. Nakamura & Richard P. Voith, 2004. "Hedonic estimates of the cost of housing services: rental and owner-occupied units," Working Papers 04-22, Federal Reserve Bank of Philadelphia. [Downloadable!]
  6. Gilbert Cette & Jacques Mairesse & Yusuf Kocoglu, 2002. "The Diffusion of ICTs and Growth of the French Economy over the Long-term, 1980-2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 4, pages 27-38, Spring. [Downloadable!]
  7. Theodore M. Crone & Leonard I. Nakamura & Richard Voith, 1999. "Measuring housing services inflation," Working Papers 99-9, Federal Reserve Bank of Philadelphia. [Downloadable!]
  8. Robert H. McGuckin & Kevin Stiroh, 2000. "Do Computers Make Output Harder to Measure?," Economics Program Working Papers 00-02, The Conference Board, Economics Program. [Downloadable!]
    Other versions:
  9. Raimund Bleischwitz, 2001. "Rethinking Productivity: Why has Productivity Focussed on Labour Instead of Natural Resources?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(1), pages 23-36, May. [Downloadable!] (restricted)
  10. Paul A. David, 2005. "Understanding Digital Technology’s Evolution and the Path of Measured Productivity Growth: Present and Future in the Mirror of the Past," Macroeconomics 0502022, EconWPA. [Downloadable!]
    Other versions:
  11. W. Erwin Diewert, 2003. "Measuring Capital," NBER Working Papers 9526, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Banco de España Occasional Papers 0607, Banco de España. [Downloadable!]
  13. Emi Nakamura & Jon Steinsson, 2005. "Price Setting in a Forward-Looking Customer Market," Macroeconomics 0509010, EconWPA. [Downloadable!]
  14. Charles Steindel & Kevin Stiroh, 2001. "Productivity: what is it and why do we care about it?," Staff Reports 122, Federal Reserve Bank of New York. [Downloadable!]
  15. Paul Beaudry & David Green, 1998. "What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique?," NBER Working Papers 6853, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Nathan McLellan, 2004. "Measuring Productivity using the Index Number Approach: An Introduction," Treasury Working Paper Series 04/05, New Zealand Treasury. [Downloadable!]
  17. Paul A. David, 2005. "Productivity growth prospects and the new economy in historical perspective," Economic History 0502005, EconWPA. [Downloadable!]
  18. Bos, Frits, 2007. "Use, misuse and proper use of national accounts statistics," MPRA Paper 2576, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-11-27.

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