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Is there really a gap between aggregate productivity and technology?

Ali Choudhary, M and Gabriel, VJ (2009) Is there really a gap between aggregate productivity and technology? Applied Economics, 41 (27). 3499 - 3503. ISSN 1466-4283

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Abstract

The important contribution by Basu and Fernald (20021. Basu , S and Fernald , JG . 2002 . Aggregate productivity and aggregate technology . European Economic Review , 46 : 963 – 91 . [CrossRef], [Web of Science ®] View all references) shows that, in practice, there is a statistically significant gap between aggregate productivity and technology that can be attributed to inefficient product and labour markets. This is important, as it implies that the Solow residual is an imperfect index for aggregate technology change. We take a related approach and find that when we control for capacity utilization, time varying markup and account for externalities between industries, by employing a superior system estimator, the gap between the aggregate productivity and technology is shown to narrow considerably.

Item Type: Article
Additional Information: This is an electronic version of an article published in Applied Economics, 41(27), 3499-3503(2009). Applied Economics is available online at: http://www.tandfonline.com/doi/abs/10.1080/00036840701537851.
Divisions: Faculty of Business, Economics and Law > Economics
Depositing User: Symplectic Elements
Date Deposited: 31 May 2012 09:12
Last Modified: 23 Sep 2013 19:23
URI: http://epubs.surrey.ac.uk/id/eprint/436675

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