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GDP Growth, Terms-of-Trade Effects and Total Factor Productivity


  • Kholi, U.
  • Fox, K.


The purpose of this paper is to access the contribution of each one of the major factors explaining Australian nominal growth: technological change, movements in the terms of trade, increases in the endowments of labour and capital, and changes in domestic output prices.

Suggested Citation

  • Kholi, U. & Fox, K., 1996. "GDP Growth, Terms-of-Trade Effects and Total Factor Productivity," Papers 96/28, New South Wales - School of Economics.
  • Handle: RePEc:fth:nesowa:96/28

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    References listed on IDEAS

    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Martin L. Weitzman, 1992. "On Diversity," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 363-405.
    3. Simon P. Anderson & André De Palma & Jacques-François Thisse, 1989. "Demand for Differentiated Products, Discrete Choice Models, and the Characteristics Approach," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 21-35.
    4. Goldberg, Pinelopi Koujianou, 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U.S. Automobile Industry," Econometrica, Econometric Society, vol. 63(4), pages 891-951, July.
    5. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
    6. Martin L. Weitzman, 1994. "Monopolistic Competition with Endogenous Specialization," Review of Economic Studies, Oxford University Press, vol. 61(1), pages 45-56.
    7. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
    8. Sutton, John, 1996. "Technology and market structure," European Economic Review, Elsevier, vol. 40(3-5), pages 511-530, April.
    9. Anderson, Simon P. & de Palma, Andre & Thisse, Jacques-Francois, 1988. "The CES and the logit : Two related models of heterogeneity," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 155-164, February.
    10. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    11. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
    12. Weitzman, M.L., 1992. "Diversity Functions," Harvard Institute of Economic Research Working Papers 1610, Harvard - Institute of Economic Research.
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    Cited by:

    1. W. Diewert, 2011. "Measuring productivity in the public sector: some conceptual problems," Journal of Productivity Analysis, Springer, vol. 36(2), pages 177-191, October.
    2. W. Diewert, 2014. "US TFP growth and the contribution of changes in export and import prices to real income growth," Journal of Productivity Analysis, Springer, vol. 41(1), pages 19-39, February.
    3. W. Erwin Diewert & Kevin J. Fox, 2017. "Decomposing Value Added Growth into Explanatory Factors," Discussion Papers 2017-02, School of Economics, The University of New South Wales.
    4. Diewert, W. Erwin, 2014. "Decompositions of profitability change using cost functions," Journal of Econometrics, Elsevier, vol. 183(1), pages 58-66.
    5. W. Erwin Diewert, 2003. "Measuring Capital," NBER Working Papers 9526, National Bureau of Economic Research, Inc.
    6. Diewert, Erwin, 2007. "Index Numbers," Economics working papers diewert-07-01-03-08-17-23, Vancouver School of Economics, revised 31 Jan 2007.
    7. Diewert, W. Erwin, 2017. "Productivity Measurement in the Public Sector: Theory and Practice," working papers erwin_diewert-2017-1, Vancouver School of Economics, revised 02 Feb 2017.
    8. Diewert, Erwin & Mizobuchi, Hideyuki, 2009. "An Economic Approach to the Measurement of Productivity Growth Using Differences Instead of Ratios," Economics working papers erwin_diewert-2009-2, Vancouver School of Economics, revised 09 Jan 2009.
    9. Nin-Pratt, Alejandro & Johnson, Michael E. & Yu, Bingxin, 2012. "Improved performance of agriculture in Africa South of the Sahara: Taking off or bouncing back?," IFPRI discussion papers 1224, International Food Policy Research Institute (IFPRI).
    10. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    11. W. Diewert & Alice Nakamura, 2003. "Index Number Concepts, Measures and Decompositions of Productivity Growth," Journal of Productivity Analysis, Springer, vol. 19(2), pages 127-159, April.
    12. Diewert, Erwin, 2008. "Changes in the Terms of Trade and Canada's Productivity Performance," Economics working papers diewert-08-03-11-11-03-49, Vancouver School of Economics, revised 18 Jul 2008.
    13. Diewert, W. Erwin & Fox, Kevin J., 2016. "A Decomposition of U.S. Business Sector TFP Growth into Technical Progress and Cost Efficiency Components," working papers erwin_diewert-2016-8, Vancouver School of Economics, revised 30 Jun 2016.
    14. Turnbull, Christopher & Sun, Sizhong & Anwar, Sajid, 2016. "Trade liberalisation, inward FDI and productivity within Australia’s manufacturing sector," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 41-51.
    15. W. Diewert, 2012. "The measurement of productivity in the nonmarket sector," Journal of Productivity Analysis, Springer, vol. 37(3), pages 217-229, June.

    More about this item



    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • D20 - Microeconomics - - Production and Organizations - - - General


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