Mapping prices into productivity in multisector growth models

Liwa Rachel Ngai () and Roberto Samaniego ()

No 7318, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Two issues related to mapping a multi-sector model into a reduced-form value-added model are often neglected: the composition of intermediate goods, and the distinction between the productivity indices for value added and for gross output. We illustrate their significance for growth accounting using the well known model of Greenwood, Hercowitz and Krusell (1997), who find that about 60% of economic growth can be attributed to investment-specific technical change (ISTC). When we recalibrate their model to account for the composition of intermediates, we find that ISTC accounts for an even greater share of post-war US growth.

Keywords: growth accounting; Intermediate goods; investment-specific technical change; multisector growth models; value added (search for similar items in EconPapers)
JEL-codes: E13 O30 O41 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-eff, nep-fdg and nep-mac
Date: 2009-06

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Related works:
Working Paper: Mapping Prices into Productivity in Multisector Growth Models (2008)
Journal Article: Mapping prices into productivity in multisector growth models (2009)
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