Does deflation method matter for productivity measures?
|Title||Does deflation method matter for productivity measures?|
|Publication Type||Working Paper|
|Year of Publication||2009|
|Authors||G. Garau, P. Lecca, L. Schirru|
|Keywords||input output, national account, prices index, total factor productivity|
In this paper, we argue against the use the double deflation method to produce an equilibrating system of account at a constant price. In fact, by relaxing such a condition, by means of the single deflation method, we obtain a measure of purchasing power transfer that can be decomposed in productivity and market distortion. Results are presented for the evolution of the Italian economy for the periods 1995-2002