A Univariate Model of Aggregate Labour Productivity

Robert Dixon () and Guay C. Lim ()

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: In this paper, we set out a model of labour productivity which distinguishes between shocks which change productivity permanently and shocks which have transient affects on productivity. We show that this model is a type of unobserved components model –a random walk with drift plus noise model. The advantage of this approach is that it provides a coherent framework to identify the deterministic trend growth component and also the productivity-enhancing (or technology-related) stochastic components. The model is applied to aggregate labour productivity in Australia and the time series of technology shocks extracted is used to shed some light on the contributions of policy reforms to productivity.

New Economics Papers: this item is included in nep-eff and nep-mac
Date: 2008-05

Downloads: (external link)
http://melbourneinstitute.com/wp/wp2008n09.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:iae:iaewps:wp2008n09

Access Statistics for this paper

More papers in Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
Address: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Contact information at EDIRC.
Series data maintained by Woei T Liew ().