Neoclassical Growth Accounting and Frontier Analysis: A Synthesis

Thijs ten Raa and Pierre Mohnen

Chapter 19 in Input–Output Economics: Theory and Applications:Featuring Asian Economies, 2009, pp 347-370 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe standard measure of productivity growth is the Solow residual. Its evaluation requires data on factor input shares or prices. Since these prices are presumed to match factor productivities, the standard procedure amounts to accepting at face value what is supposed to be measured. In this paper, we determine total factor productivity growth without recourse to data on factor input prices. Factor productivities are defined as Lagrange multipliers to the program that maximizes the level of domestic final demand. The consequent measure of total factor productivity is shown to encompass not only the Solow residual, but also the efficiency change of the frontier analysis and the hitherto slippery terms of-trade effect. Using input–output tables from 1962 to 1991, we show that the source of Canadian productivity growth has shifted from technical change to terms-of-trade effects.

Keywords: Input–Output Analysis; National Accounts; Productivity; Performance; Canadian Economy; Chinese Economy; Indian Economy; Asian Economics (search for similar items in EconPapers)
Date: 2009
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Related works:
Journal Article: Neoclassical Growth Accounting and Frontier Analysis: A Synthesis (2002)
Working Paper: Neoclassical growth accounting and frontier analysis: A synthesis (2002)
Working Paper: Neoclassical Growth Accounting and Frontier Analysis: A Synthesis (2000)
Working Paper: Neoclassical Growth Accounting and Frontier Analysis: A Synthesis (2000)
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