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The Integration of the Canadian Productivity Accounts within the System of National Accounts: Current Status and Challenges Ahead

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  • John R. Baldwin
  • Tarek Harchaoui

Abstract

A statistical agency faces several challenges in building Productivity Accounts. What started out as a request for simple ratios of output to employment has moved to a demand for multifactor (total factor) productivity measures that take into account both labor and capital inputs, the compositional changes in both, and price corrections for the changing quality of outputs. The challenge that faces users of productivity measures is that many series often exist within statistical agencies that can be used on an ad hoc basis by outsiders to generate productivity estimates; however, these series often generate conflicting estimates. Only by pulling together data into one coherent consistent framework can the statistical agency solve the problem of "multiple" stories. This can be done by developing a set of Productivity Accounts that are part of an integrated system of National Accounts. This paper discusses the challenges that a statistical agency faces in this area -- as illustrated by the Canadian experience. First, it examines the progress that has been made in developing a system that integrates the Productivity Accounts into the overall System of National Accounts. It also discusses deficiencies that still need to be overcome. The paper notes that integration provides not only benefits when it comes to the construction of productivity estimates, but also a means of quality control for the National Accounts. Productivity accounts bring together data on outputs, materials inputs, labor and capital. By confronting one series with another, the process of constructing productivity accounts provides a valuable means of quality assessment. It also helps to identify and fill data gaps. An integrated set of productivity accounts enhances the quality of the SNA through improvements in accuracy, coherence, relevance, and interpretability. Finally, the paper focuses on the need to consider whether the SNA manual should be extended into the area of productivity measurement. International comparisons of GDP have benefited immensely by the development of international standards over the last half-century. But productivity is not a central focus of the 1993 SNA. The paper argues that the advantage of integrating productivity accounts into the general accounts is sufficiently great that it is time to include more detail on the nature of productivity accounts in the general SNA framework.

Suggested Citation

  • John R. Baldwin & Tarek Harchaoui, 2005. "The Integration of the Canadian Productivity Accounts within the System of National Accounts: Current Status and Challenges Ahead," NBER Working Papers 11107, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11107
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    References listed on IDEAS

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    1. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
    2. Peter Sutherland, 2003. "The Outlook for World Trade," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 4(3), pages 27-34, July.
    3. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
    4. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Growth of U.S. Industries and Investments in Information Technology and Higher Education," NBER Chapters,in: Measuring Capital in the New Economy, pages 403-478 National Bureau of Economic Research, Inc.
    5. Paul Schreyer, 2001. "The OECD Productivity Manual: A Guide to the Measurement of Industry-Level and Aggregate Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 37-51, Spring.
    6. Dale W. Jorgenson, 2007. "Information Technology and the G7 Economies," NBER Chapters,in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 325-350 National Bureau of Economic Research, Inc.
    7. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    8. Harchaoui, Tarek & Tarkhani, Faouzi, 2004. "Whatever Happened to Canada-United States Economic Growth and Productivity Performance in the Information Age?," Economic Analysis (EA) Research Paper Series 2004025e, Statistics Canada, Analytical Studies Branch.
    9. Baldwin, John R. & Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis Division, number stcb6e, June.
    10. Frank Gollop & Gregory P. Swinand, 2001. "Total Resource Productivity. Accounting for Changing Environmental Quality," NBER Chapters,in: New Developments in Productivity Analysis, pages 587-608 National Bureau of Economic Research, Inc.
    11. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research.
    12. Harchaoui, Tarek & Jean, Jimmy & Tarkhani, Faouzi, 2003. "Prosperity and Productivity: A Canada-Australia Comparison," Economic Analysis (EA) Research Paper Series 2003018e, Statistics Canada, Analytical Studies Branch.
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    Citations

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    Cited by:

    1. Beckstead, Desmond & Burrows, Sean & Gellatly, Guy, 2007. "New Economy: Using National Accounting Architecture to Estimate the Size of the High-technology Economy," The Canadian Economy in Transition 2007015e, Statistics Canada, Economic Analysis Division.
    2. Maynard, Jean-Pierre, 2005. "La mesure annuelle du volume de travail selon l'experience canadienne," Analyse economique : documents sur la methodologie - Comptes nationaux 2005005f, Statistics Canada, Division de l'analyse economique.
    3. Maynard, Jean-Pierre, 2005. "Annual Measure of the Volume of Work Consistent with the SNA: The Canadian Experience," Economic Analysis Methodology Paper Series: National Accounts 2005005e, Statistics Canada, Economic Analysis Division.
    4. Maynard, Jean-Pierre, 2007. "A Comparison of GDP Per Capita in Canada and the United States from 1994 to 2005," Insights on the Canadian Economy 2007016e, Statistics Canada, Economic Analysis Division.
    5. Maynard, Jean-Pierre, 2007. "Une comparaison du PIB par habitant au Canada et aux Etats-Unis de 1994 a 2005," Apercus sur l'economie canadienne 2007016f, Statistics Canada, Division de l'analyse economique.
    6. Beckstead, Desmond & Burrows, Sean & Gellatly, Guy, 2007. "Nouvelle economie: utilisation de l'architecture de la comptabilite nationale pour estimer l'importance de l'economie de haute technologie," L'economie canadienne en transition 2007015f, Statistics Canada, Division de l'analyse economique.

    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; 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

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