Does deflation method matter for productivity measures?
|Does deflation method matter for productivity measures?
|Year of Publication
|Garau, G, Lecca, P, Schirru, L
|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