Economics, Econometrics and Finance
8 years ago

New study reveals how adjusting productivity measures can boost economic growth

Applied Economics Letters
The behaviour of productivity growth rates and composition bias in the labour input
James MacGee, Weiqiu Yu

Paper Summary

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Productivity growth rates can be affected by errors in measuring labor and capital inputs. By adjusting for these errors in Canada, it was found that productivity shocks are actually caused by cyclical variations in labor and capital inputs over the business cycle.