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The Measurement of TFP in Argentina, 1990-2004: A Case of the Tyranny of Numbers, Economic Cycles and Methodology

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  • Ariel Coremberg

Abstract

The aim of this study is to examine the main sources of growth in Argentina for the period 1990-2004 in order to identify the dominant growth profile: either extensive, which is associated with factor accumulation and utilisation, or intensive, which is based on productivity gains. The study proposes a methodology for identifying gains in total factor productivity (TFP) net of short-run fluctuations in relative prices and cyclical changes in factor utilisation. When applying this methodology to Argentina in the period 1990-2004, we find that economic growth appears to be extensive during the whole period, biased towards capital accumulation and utilisation during the 1990s and biased towards labour input after the 2002 devaluation. These results raise doubts as to whether the Argentine economy is able to generate long-run productivity gains independent of composition and quality effects and cyclical changes in factors utilisation, gains that are needed to achieve sustainable long-run growth.

Suggested Citation

  • Ariel Coremberg, 2008. "The Measurement of TFP in Argentina, 1990-2004: A Case of the Tyranny of Numbers, Economic Cycles and Methodology," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 52-74, Fall.
  • Handle: RePEc:sls:ipmsls:v:17:y:2008:5
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    File URL: http://www.csls.ca/ipm/17/IPM-17-coremberg.pdf
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    References listed on IDEAS

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    1. Finn Kydland & Carlos E.J.M.Zarazaga, 2002. "Argentina's recovery and excess capital shallowing of the 1990s," Estudios de Economia, University of Chile, Department of Economics, vol. 29(1 Year 20), pages 35-45, June.
    2. Basu, Susanto & Fernald, John G. & Shapiro, Matthew D., 2001. "Productivity growth in the 1990s: technology, utilization, or adjustment?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, pages 117-165.
    3. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
    4. Hulten, Charles R., 1986. "Productivity change, capacity utilization, and the sources of efficiency growth," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 31-50.
    5. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    6. Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
    7. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
    8. Galiani, Sebastián & Heymann, Daniel & Tomassi, Mariano, 2003. "Expectativas frustradas: el ciclo de la convertibilidad," Estudios y Perspectivas – Oficina de la CEPAL en Buenos Aires 16, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    10. W. Erwin Diewert, 1995. "Price and Volume Measures in the System of National Accounts," NBER Working Papers 5103, National Bureau of Economic Research, Inc.
    11. Hofman, André A., 1991. "The role of capital in Latin America: a comparative perspective of six countries for 1950-1989," Series Históricas 4, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    More about this item

    Keywords

    TFP; Measurement; business cycles; Cyclicality;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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