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A General Equilibrium Analysis of the Evolution of the Canadian Service Productivity


  • Pierre Mohnen
  • Thijs Ten Raa


This paper measures factor productivities (and hence total factor productivity growth) directly on the basis of the fundamentals of the economy (endowments, preferences and technology), without recourse to market prices. The factor productivities are the Lagrange multipliers of a linear program maximizing domestic final demand subject to material balances, endowment constraints, and a balance of payments constraint. The model is applied to the data of the Canadian economy from 1962 to 1991. The commonly held view that services are dragging down the whole economy does not stand the facts. Dans cet article, nous mesurons les productivités factorielles (et dès lors la croissance de la productivité totale des facteurs) à partir des principes essentiels d'une économie (les ressources, les préférences et la technologie) sans avoir recours aux prix du marché. Les productivités factorielles sont les multiplicateurs de Lagrange d'un programme linéaire qui maximise la demande finale domestique sous les contraintes sectorielles, les contraintes de ressources et la contrainte de la balance commerciale. Nous appliquons le modèle aux données de l'économie canadienne de 1962 à 1991. Les données ne concordent pas avec l'hypothèse traditionnelle selon laquelle les services ralentissent la croissance de la productivité.

Suggested Citation

  • Pierre Mohnen & Thijs Ten Raa, 1997. "A General Equilibrium Analysis of the Evolution of the Canadian Service Productivity," CIRANO Working Papers 97s-37, CIRANO.
  • Handle: RePEc:cir:cirwor:97s-37

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    More about this item


    Productivity; linear programming; Canada; Productivité; programmation linéaire; Canada;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada


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