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Measuring productivity increase by long-run prices: the early analyses of G.R. Porter and R. Giffen

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  • Arrigo Opocher

Abstract

The nineteenth-century economic commentators did not possess a formal measure of the rate at which productivity was increasing during the industrial take-off. Yet they did develop an intuitive method based on the comparative change in long-period prices and wages. This paper reviews the contributions of G.R. Porter and R. Giffen and, in the light of some modern contributions, presents an assessment of their rationality and improvability under current standards. It is argued that a proper measure of industrial productivity increase based on long-run prices is the mathematical dual of a Solovian measure of the industrial total factor productivity growth.

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  • Arrigo Opocher, 2010. "Measuring productivity increase by long-run prices: the early analyses of G.R. Porter and R. Giffen," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(5), pages 1271-1291.
    • Handle: RePEc:taf:eujhet:v:17:y:2010:i:5:p:1271-1291
    DOI: 10.1080/09672567.2010.522243
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    1. Heinz Kurz, 2010. "Technical progress, capital accumulation and income distribution in Classical economics: Adam Smith, David Ricardo and Karl Marx," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(5), pages 1183-1222.
    2. Opocher, Arrigo, 2009. "A Dual-Solovian Measure of Productivity Increase and its Early Antecedents," MPRA Paper 15541, University Library of Munich, Germany.
    3. Lydall, Harold, 1969. "On Measuring Technical Progress," Australian Economic Papers, Wiley Blackwell, vol. 8(12), pages 1-12, June.
    4. Dale W. Jorgenson, 1991. "Productivity and Economic Growth," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 19-118, National Bureau of Economic Research, Inc.
    5. Charles R. Hulten, 1978. "Growth Accounting with Intermediate Inputs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 511-518.
    6. Arrigo Opocher, 2010. "The future of the working classes: a comparison between J.S. Mill and A. Marshall," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(2), pages 229-253.
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    Cited by:

    1. Bisello, Martina & Opocher, Arrigo, 2013. "Real cost reduction and productivity increase in an individual industry: a price-accounting approach in theory and practice," MPRA Paper 48367, University Library of Munich, Germany.
    2. Nicholas Tsounis & Ian Steedman, 2021. "A New Method for Measuring Total Factor Productivity Growth Based on the Full Industry Equilibrium Approach: The Case of the Greek Economy," Economies, MDPI, vol. 9(3), pages 1-21, August.
    3. Malcolm Abbott, 2018. "Productivity: a history of its measurement," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2018(1), pages 57-80.

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    More about this item

    Keywords

    Productivity growth; total factor productivity; cost function; real wages; income distribution;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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