A Proposal to Improve Country-Level Data on Total Factor Productivity Growth

Andrew Warner

No 2024/067, IMF Working Papers from International Monetary Fund

Abstract: The assumption behind popular data on national capital stocks, and therefore total factor productivity, is that countries were in a steady state in the first year that investment data became available. This paper argues that this assumption is highly implausible and is necessarily responsible for implausible data on the ratio of capital to output and productivity growth. It is not credible that countries with similar incomes had huge differences in their capital stocks. This paper claims, with evidence, that implausible features of the data can be greatly reduced by using data on electricity usage or national stocks of road vehicles.

Keywords: Productivity; Total Factor Productivity; Economic Growth; capital output ratio; total factor productivity growth; capita-output ratio; investment data; TFP growth estimate; Capital productivity; Stocks; Capital adequacy requirements; Electricity; Africa; Global (search for similar items in EconPapers)
Pages: 39
Date: 2024-03-22
New Economics Papers: this item is included in nep-eff
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