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The Impact of Subsidies on Measuring Productivity and the Sources of Economic Growth

Author

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  • Jon D. Samuels
  • Corby Garner
  • Justin Harper

Abstract

Taxes and subsidies drive a wedge between prices received and paid by producers and those paid by purchasers. Motivated by the large economic subsidies that were part of the policy response to the COVID-19 pandemic, this paper introduces a new treatment for taxes and subsidies into the BEA-BLS Integrated industry-level production account. Over shorter time periods, and for particular individual industries, these adjustments affect measured productivity growth, but have a minimal impact at the aggregate. Nevertheless, for shorter time periods, and for industries that receive large subsidies, accounting for the effect of taxes and subsidies has a noticeable impact on the measured sources of growth.

Suggested Citation

  • Jon D. Samuels & Corby Garner & Justin Harper, 2024. "The Impact of Subsidies on Measuring Productivity and the Sources of Economic Growth," BEA Papers 0127, Bureau of Economic Analysis.
    • Handle: RePEc:bea:papers:0127
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    File URL: https://www.bea.gov/system/files/papers/BEA-WP2024-3.pdf
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    References listed on IDEAS

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    1. Jason W. Chute & Stephanie H. McCulla & Shelly Smith, 2018. "Preview of the 2018 Comprehensive Update of the National Income and Product Accounts," Survey of Current Business, Bureau of Economic Analysis, April.
    2. Kevin B. Barefoot & Louis E. Feagans & Teresa L. Gilmore & Chelsea K. Smith-Nelson, 2018. "Preview of the 2018 Comprehensive Update of the Industry Economic Accounts," Survey of Current Business, Bureau of Economic Analysis, August.
    3. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114, December.
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    Cited by:

    1. Rachel Soloveichik, 2024. "Radio Spectra as Telecommunications Assets," BEA Papers 0133, Bureau of Economic Analysis.

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    More about this item

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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