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Double Deflation and the Measurement of Output and Productivity in UK Manufacturing 1979-89


  • Paul Stoneman
  • Nathan Francis


The objective of this paper is to examine the impact of applying double deflation methods to the measurement of productivity growth in UK manufacturing between 1979 and 1989. A number of alternative indicators of output growth are considered and it is argued that double deflated value added is the superior concept to employ for the measurement of productivity. It is shown that output measured by double deflated value added fell by 0.05% over the period between 1979 and 1989 whereas the official series indicates that output rose by 12.2% over the period. Measuring productivity as output per person employed, the double deflated value added measure indicates that between 1979 and 1989productivity increased by 34%> whereas the official series indicates an increase of 51 %. Whereas the latter may indicate a productivity miracle the former does not

Suggested Citation

  • Paul Stoneman & Nathan Francis, 1994. "Double Deflation and the Measurement of Output and Productivity in UK Manufacturing 1979-89," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(3), pages 423-437.
  • Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:423-437
    DOI: 10.1080/758536231

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    Cited by:

    1. Peter Hooper & Elizabeth Vranlovich, 1995. "International comparisons of the levels of unit labor costs in manufacturing," International Finance Discussion Papers 527, Board of Governors of the Federal Reserve System (U.S.).
    2. Stuart Macdonald & Pat Anderson & Dieter Kimbel, 2000. "Measurement or Management?: Revisiting the Productivity Paradox of Information Technology," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 69(4), pages 601-617.
    3. Añón Higón, Dolores & Manjón Antolín, Miguel, 2012. "Multinationality, foreignness and institutional distance in the relation between R&D and productivity," Research Policy, Elsevier, vol. 41(3), pages 592-601.

    More about this item


    Double deflation; Value added; Productivity; JEL classifications: C8; E2; L6;

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • L6 - Industrial Organization - - Industry Studies: Manufacturing


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