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Total Factor Productivity and Relative Prices: the case of Italy


  • G. Garau


  • S. Deriu


Fontela in his seminal work (1989) set up the distributional rule of productivity gain in the Input–Output context (Total Factor Productivity Surplus, TFPS). Garau (1996) proposed an extension to identify a measure of surplus, called Purchasing Power Transfer (PPT). This measure is given by the productivity gains and the market surplus generated by extra–profits conditions derived from rental position detained by agents. Such a decomposition is very useful from our point of view since it would provide information about the degree of non–competitiveness in different markets. In our paper, we compute and explain Fontela's TFPS comparing it with Garau's PPT for Italy for the year 2009-2014.

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  • G. Garau & S. Deriu, 2020. "Total Factor Productivity and Relative Prices: the case of Italy," Working Paper CRENoS 202003, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:202003

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    1. Gabrielle Antille & Emilio Fontela, 2003. "The Terms of Trade and the International Transfers of Productivity Gains," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 3-19, March.
    2. Baumol, William J & Wolff, Edward N, 1984. "On Interindustry Differences in Absolute Productivity," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1017-1034, December.
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    input-output; Total Factor Profuctivity Surplus; Relative Price;

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