IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3970.html
   My bibliography  Save this paper

What is Productivity: Capacity or Welfare Management?

Author

Listed:
  • Charles R. Hulten

Abstract

A number of recent papers have examined the role of environmental variables in accounting for economic growth, and have concluded that net measures of national product are superior to gross measures in portraying the outcome of the growth process. This paper argues that the two measures are not substitutes, but complements which reveal different aspects of economic growth: gross product is the output concept for estimating the structure of production. while net product is the correct concept for getting at the welfare consequences of economic growth. It is then shown that this capacity-welfare nexus is mirrored in the Hicksian and Harrodian definitions of technical change. An alternative to the conventional Solow growth accounting framework is presented in which the change in national wealth is decomposed into components corresponding to labor input and the Harrodian rate of technical change.

Suggested Citation

  • Charles R. Hulten, 1992. "What is Productivity: Capacity or Welfare Management?," NBER Working Papers 3970, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3970
    Note: PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3970.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    2. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    5. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    6. Hulten, Charles R, 1979. "On the "Importance" of Productivity Change," American Economic Review, American Economic Association, vol. 69(1), pages 126-136, March.
    7. Karl-Göran Mäler, 1991. "National accounts and environmental resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 1(1), pages 1-15, March.
    8. Charles R. Hulten, 1978. "Growth Accounting with Intermediate Inputs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 511-518.
    9. repec:bla:ecorec:v:78:y:2002:i:243:p:375-80 is not listed on IDEAS
    10. Hulten, Charles R, 1973. "Divisia Index Numbers," Econometrica, Econometric Society, vol. 41(6), pages 1017-1025, November.
    11. Evsey D. Domar, 1963. "Total Productivity and the Quality of Capital," Journal of Political Economy, University of Chicago Press, vol. 71(6), pages 586-586.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    2. Hulten, Charles R., 2010. "Growth Accounting," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 987-1031, Elsevier.
    3. Oulton, Nicholas, 2007. "Investment-specific technological change and growth accounting," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1290-1299, May.
    4. Charles R. Hulten, 2018. "The Importance of Education and Skill Development for Economic Growth in the Information Era," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 115-146, National Bureau of Economic Research, Inc.
    5. Charles R. Hulten & Leonard I. Nakamura, 2017. "Accounting for Growth in the Age of the Internet The Importance of Output-Saving Technical Change," Working Papers 17-24, Federal Reserve Bank of Philadelphia.
    6. Oulton, Nicholas, 2004. "A statistical framework for the analysis of productivity and sustainable development," LSE Research Online Documents on Economics 19963, London School of Economics and Political Science, LSE Library.
    7. Charles R. Hulten, 2017. "The Importance of Education and Skill Development for Economic Growth in the Information Era," NBER Working Papers 24141, National Bureau of Economic Research, Inc.
    8. Alexander Murray, 2016. "Partial versus Total Factor Productivity: Assessing Resource Use in Natural Resource Industries in Canada," CSLS Research Reports 2016-20, Centre for the Study of Living Standards.
    9. Sudit, Ephraim F., 1995. "Productivity measurement in industrial operations," European Journal of Operational Research, Elsevier, vol. 85(3), pages 435-453, September.
    10. Charles R. Hulten, 1996. "Quality Change in Capital Goods and Its Impact on Economic Growth," NBER Working Papers 5569, National Bureau of Economic Research, Inc.
    11. Scott L. Baier & Gerald P. Dwyer & Robert Tamura, 2006. "How Important are Capital and Total Factor Productivity for Economic Growth?," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 23-49, January.
    12. Edward B. Barbier, 2017. "Natural Capital and Wealth in the 21st Century," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(3), pages 391-405, June.
    13. Charles R. Hulten & Paul Schreyer, 2010. "GDP, Technical Change, and the Measurement of Net Income: the Weitzman Model Revisited," NBER Working Papers 16010, National Bureau of Economic Research, Inc.
    14. Mariela Dal Borgo & Peter Goodridge & Jonathan Haskel & Annarosa Pesole, 2013. "Productivity and Growth in UK Industries: An Intangible Investment Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 806-834, December.
    15. Nelson H. Barbosa Filho, 2005. "Estimating Potential Output : a Survey of the Alternative Methods and their Applications to Brazil," Discussion Papers 1092, Instituto de Pesquisa Econômica Aplicada - IPEA.
    16. Ayres, Robert U, 2001. "The minimum complexity of endogenous growth models:," Energy, Elsevier, vol. 26(9), pages 817-838.
    17. Almas Heshmati, 2003. "Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 79-112, February.
    18. Carol Corrado & Charles Hulten & Daniel Sichel, 2009. "Intangible Capital And U.S. Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 661-685, September.
    19. Md Shahiduzzaman & Allan Layton & Khorshed Alam, 2015. "On the contribution of information and communication technology to productivity growth in Australia," Economic Change and Restructuring, Springer, vol. 48(3), pages 281-304, November.
    20. Martin Neil Baily & Charles L. Schultze, 1990. "The Productivity of Capital in a Period of Slower Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 369-420.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3970. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.