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 EconWPA in its series Macroeconomics with number 0306006.
Length: 38 pages
Date of creation: 09 Jun 2003
Date of revision:
Note: Type of Document - acrobat pdf; prepared on IBM PC ; to print on HP; pages: 38; figures: included
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price mismeasurement; productivity slowdown; embodied and disembodied productivity;
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.
- Comin, D., 2002. "Using Investment Data to Assess the Importance of Price Mismeasurement," Working Papers 02-08, C.V. Starr Center for Applied Economics, New York University.
- Diego Comin, 2004. "Using Investment Data to Assess the Importance of Price Mismeasurement," NBER Working Papers 10627, National Bureau of Economic Research, Inc.
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- D9 - Microeconomics - - Intertemporal Choice
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
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