Multifactor Productivity: Not

JayHecht at aol.com JayHecht at aol.com
Thu Jun 17 13:47:16 PDT 1999


Folks,

Jack Triplett recently noted how the top 6 computer-consuming industries (all services) have had very poor BLS TFPs. Turns out that because all these industries are INTERMEDIATE industries (e.g. insurance bought by a steel company is netted out of final "value added" output) their productivity only goes up to the extent that measured retail service TFP goes up. Thus, measured TFP in the insurance industry has been NEGATIVE from 1973 to 1996, even though they've been huge consumers of computers. In addition, if you just divide premiums/workers, you get a compund average annual growth rate of 5.6% from 1979 to 1997.

Jason

Jason



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