Using investment data to assess the importance of price mismeasurement

Description

"This paper presents a new approach to assess the role of price mismeasurement in the productivity slowdown. I invert the firm's investment decision to identify the embodied and disembodied components of productivity growth. With a Cobb-Douglas production function, output price mismeasurement only should affect the latter. Contrary to the mismeasurement hypothesis, I find that in the Post-War period, disembodied productivity grew faster in the hard-to-measure than in the non-manufacturing easy-to-measure sectors, and that disembodied productivity slowed down less in the hard-to-measure than in the easy-to-measure sectors since the 70's. These results hold a fortiori when capital and labor are complements"--National Bureau of Economic Research web site.

Subjects

Series Statement

• NBER working paper series ;
• working paper 10627
• Working paper series (National Bureau of Economic Research : Online) ;
• working paper no. 10627.

Links

• http://papers.nber.org/papers/W10627
• URL