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Journal of Productivity Analysis

, Volume 18, Issue 2, pp 111–128 | Cite as

Neoclassical Growth Accounting and Frontier Analysis: A Synthesis

  • Thijs ten Raa
  • Pierre Mohnen
Article

Abstract

The standard measure of productivity growth is the Solow residual. Its evaluation requires data on factor input shares or prices. Since these prices are presumed to match factor productivities, the standard procedure amounts to accepting at face value what is supposed to be measured. In this paper we estimate total factor productivity growth without recourse to data on factor input prices. Factor productivities are defined as Lagrange multipliers to the program that maximizes the level of domestic final demand. The consequent measure of total factor productivity is shown to encompass not only the Solow residual, but also the efficiency change of frontier analysis and the hitherto slippery terms-of-trade effect. Using input-output tables from 1962 to 1991 we show that the source of Canadian productivity growth has shifted from technical change to terms-of-trade effects.

total factor productivity growth efficiency change terms-of trade effect growth accounting data envelopment analysis 

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Thijs ten Raa
    • 1
  • Pierre Mohnen
    • 2
    • 3
    • 4
  1. 1.Tilburg UniversityTilburg, TheNetherlands
  2. 2.Université du Québec à Montréal, CIRANOCanada
  3. 3.University MaastrichtCanada
  4. 4.MERIT MERITNetherlands

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