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Additional resources for Developments in Econometric Analyses of Productivity: Measurement and Modeling Issues

Sample text

This is confirmed by the fact that the lowest rates were reported by nine Ontario industries, five Quebec industries, four Prairie industries, two British Columbia industries, and none in the Atlantic region and the Rest of Canada. Ontario industries were surpassed in TFP growth by seven of eight industries in the Rest of Canada, six of six industries in the Atlantic region, and twelve of eighteen cases in Quebec. Comparing TFP growth, the Prairie industries and Ontario were divided four to four.

Consider first the accounting identities expressed in equations (3-9) and (3-19). The former defines the value of a sector's value added as the value of that sector's output less the value of its intermediate input purchases. The latter states that the value of each sector's output equals the sum of the values of its products delivered to intermediate and final demands. Totally differentiating (3-9) and (3-19) with respect to time leads to expressions that, respectively, can be written in the forms, din Jj = qjZj d InZj _~ PiXij d InXij q; Jj dt dt i qJ Vj dt u= 1,2, ...

Kuznets, Solow, Denison, and others analyzing aggregate productivity growth reason that goods destined for final demand are the ultimate objective of economic production. Kendrick (1973) presents the argument clearly: It is the final products included in national product that are the objective of production. These are the goods that satisfy current consumer wants or that add to stocks of productive capacity for satisfying future wants, to use the definition of Kuznets and many earlier national income theorists.

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