Mapping Prices into Productivity in Multisector Growth Models

L. Rachel Ngai and Roberto Samaniego ()

CEP Discussion Papers from Centre for Economic Performance, LSE

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 value added productivity and gross output productivity. We demonstrate their quantitative significance for the case of 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 allow for even a small equipment share of intermediates, we find that ISTC accounts for almost the entirety of postwar US growth.

Keywords: Intermediate goods; investment-specific technical change; growth accounting; gross output; multisector growth models (search for similar items in EconPapers)
JEL-codes: E13 O30 O41 O47 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Mapping prices into productivity in multisector growth models (2009)
Working Paper: Mapping prices into productivity in multisector growth models (2009)
Working Paper: Mapping prices into productivity in multisector growth models (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0869

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