Creative Destruction and the Measurement of Productivity Change

John Metcalfe and Ronald Ramlogan

Revue de l'OFCE, 2006, vol. 97 bis, issue 5, 373-397

Abstract: Recent advances in the measurement of productivity change have exposed a much clearer picture of the turbulent dynamics of restless capitalism. This essay has two objectives. First, to show that the population method drawn from evolutionary theory provides a coherent frame in which the various processes impinging on productivity change can be integrated. Secondly, to identify some of the puzzles and ambiguities that arise from decomposing any aggregate measure of productivity growth into innovation effects in firms and selection effects in markets. We shall also show that there is no unique way of making this decomposition. This is an important matter because the transmission process between innovation and changing resource allocation underpins the process of economic development in the broad sense. JEL Classification: D24, E11, O30, O40.

Keywords: productivity change and evolutionary population dynamics; fisher price theorems (search for similar items in EconPapers)
JEL-codes: D24 E11 O30 O40 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (14)

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