The Economic Measurement Initiative of the Centre for Applied Economic Research will once again be hosting its twenty-second annual international workshop.
The aim of the workshop is to create a genuine engagement between academics, statistical agency researchers, government policy makers and industry representatives from all around the world, leading to an improved understanding of economic measurement and the potential impact on policy.
Erwin Diewert (UBC and UNSW)
Ulrich Kohli (University of Geneva)
Alan Woodland (UNSW)
“Endogenous Technical Change, Population Ageing and Trade”
Ken Clements (University of Western Australia)
Shiji Zhao and Will Chancellor (ABARES)
Robert Cairns (McGill University)
Substitute presenter for Jan de Haan
Kevin Fox (UNSW)
W. Erwin Diewert University of British Columbia and UNSW Sydney and Kevin J. Fox UNSW
Abstract - Definitions of output and input are key to studies of productivity analysis, as they are to the national accounts of countries. This paper systematically reviews alternative definitions at production unit and aggregate levels, illustrating the different perspectives that they provide on production and income, and making the case for their use in understanding different aspects of firm and country economic performance.
Ulrich Kohli University of Geneva
Abstract - Real Gross Domestic Income (GDI) is an important macroeconomic concept that has long been and still is largely neglected by economic analysts. This is due in parts to the fact that there is no widely accepted definition of it and, consequently, of its trading-gain component. In this paper we examine a number of competing definitions of real GDI and we argue that the case in favor of using the price of gross domestic final expenditure as the GDI deflator is overwhelming. The recognition of the central role of real GDI also has implications for the measurement of productivity. Moreover, we argue that the line between productivity growth and trading gains is often somewhat blurred, which is a strong argument in support of considering both effects jointly. The paper looks both at the Laspeyres and the Törnqvist aggregation, and it identifies the functional forms of the underlying technology for which these indices are exact. It also shows how the trading gains really consist of the two separate effects, a terms-of-trade effect and a realexchange-rate-effect; most statistical agencies consider only the first effect, which suggests that their estimates of the trading gains are incomplete and that their measures of real GDI are conceptually flawed. Our approach recognizes the fact that almost all international trade is in middle products, but we show that our results are still valid in a simpler setting where all traded products are final goods, such as in the well-known Heckscher-Ohlin-Samuelson model.