A Growth Accounting-based Producitivity Analysis for the Flemish Economy: A First Exercise

The objective of this paper is twofold. The first focus is on a productivity analysis, including an assessment of the impact on productivity of investments in capital, labour and other inputs (energy, material). To this end a growth accounting system is developed, although this is more than an auxiliary tool. The growth accounting exercise is done for the Flemish economy as well as for the other Belgian regions (i.e. Brussels and Wallonia). Through a growth accounting analysis measures of output growth can be decomposed into the contributions of the inputs and productivity and this in a consistent accounting framework. The importance of labour, capital and intermediate inputs for economic growth can be assessed. It also allows to derive a measure of multi-factor productivity, which measures disembodied technological change in a neo-classical setting. In practice, multi-factor productivity can be influenced by many things including organisational changes and also measurement errors. Less strictly, multi-factor productivity can be interpreted as an efficiency measure since it improves the productivity of all inputs, which makes it interesting to analyse. growth accounting approach on a regional and sectoral level Expected results include a detailed analysis of Flemish economic growth and its sources as well as a productivity analysis, both in a growth accounting framework.