Using detailed (4-digit SIC) industry data for the years 1958-1989, I examine whether the recent acceleration in manufacturing productivity can be attributed to the effects of mismeasurement of the prices of inputs and output, by testing a model linking a set of proxy variables for measurement error to a series of measures of acceleration in total factor productivity (TFP). Alternative TFP estimates are presented in order to determine if the findings are sensitive to the method of TFP calculation. The results are inconsistent with the measurement error hypothesis and invariant to the specification of the TFP equation.
ASJC Scopus subject areas
- Business and International Management
- Social Sciences (miscellaneous)
- Economics and Econometrics