Questions tagged [productivity]
A measure of efficiency in production for some given set of inputs
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The CORE team's writings about labour productivity, real wages, markup and the price-setting curve
I've been reading the free online economics handbook that's developed as part of the CORE-project (here). The book is a refreshing read, but I'm struggling to follow their discussion of the price ...
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1answer
38 views
Relationship between capital and decreasing marginal prodcutivity
In Capital by Thomas Piketty ( chapter The capital - labor spit in the twenty first century - page 271) we have below quote
The evolution of the rate of return on capita, r, significantly reduces the ...
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1answer
38 views
Error while estimating a production function with prodest package in R
I have an unbalanced panel with 15063 firms between 2012 and 2018.
I am using this code to estimate the production function with Levinsohn & Petrin method:
...
0
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1answer
22 views
can Unit Labour Cost > 100%?
I struggle to interpret this ECB chart:
click here for the chart
Several countries show consistently $Unit Labour Cost \gg 100%$. For example, Lithuania.
Cost of labour $\gg$ Total Output, doesn't ...
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0answers
34 views
Relationship between productivity and GDP
I was looking at the OECD data for GDP per hour worked as a stand in for productivity and was extremely confused when I started comparing the numbers and tried to understand the relationship between ...
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1answer
61 views
Literature recommendation
Classic economic theory suggests people earn wages according to their productivity. Over time CEO's, directors, managers and the like seem to earn more relative to the 'normal worker'. Lets call this ...
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2answers
77 views
Competitive wages under imperfect information
Do competitive wages always have to be defined by marginal productivity? Can we have competitive wages which are not based on productivity, when the information is not perfect?
To put it in context, ...
2
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1answer
55 views
Human Capital Vs TFP
I'm interested in familiarizing myself with some of the intra-debates that have occurred over the years, having to do with Mankiw, Romer, Weil (1992) and Klenow, Rodriguez-Clare (1997). Some argue ...
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2answers
78 views
Basic New Keynesian model with flexible price
I would like to know what would be the response of variables in the Basic New Keynesian model but with flexible prices (ie not with Calvo pricing). For example I have troubles to see how having ...
0
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1answer
70 views
etymology of TFP (total factor productivity)
In economics, total-factor productivity (TFP), also called
multi-factor productivity, is usually measured as the ratio of
aggregate output (e.g., GDP) to aggregate inputs.1 Under some
simplifications ...
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0answers
117 views
Arellano and Bond (1991) GMM estimation in R by using plm package
I am a last-year student at university, currently working on my Bachelor's (so still learning R), and I really hope that you would suggest a potential solution (even if to use Python).
So, the main ...
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0answers
39 views
How can I add a multidimensional panel to estimate TFP (year, id, region) in R?
I'm not sure about adding fixed effects for the variables year,id,region (using the estprod library) as in this paper using LP stimator.
In the STATA forum ( #18 #...
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1answer
72 views
Unbalanced panel data in prodest package in R
I have a question regarding the usage of unbalanced panel data for TFP estimation by using the prodest package.
The dataset could be found here: https://drive.google.com/file/d/...
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3answers
1k views
All else being equal, What is the value of job creation?
Job creation value
Just to clarify, I have no experience, academic background or deep understanding of economics. Apologies for such a basic question but I couldn't find a real answer.
I hear a lot ...
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0answers
23 views
Is this a correct way of calculating productivity? And can the proposed data be (accurately) used for doing so?
I want to know if my thinking for calculating productivity [2019-USD/hour-worked] is correct.
Basics:
Take the GDP of a country and divide by the total amount of hours worked in that country -> ...
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0answers
216 views
Stochastic Frontier Analysis (SFA) in Stata: Technical Efficiency Estimates
I am prepared to look quite the fool, but hopefully you can help me.
I am trying to perform Stochastic Frontier Analysis on a balanced panel dataset by estimating the following model:
I think the ...
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0answers
44 views
Prodest package in R for TFP estimation, gives different results
I have the following issue: each time I run the estimation of the TFP by using prodest package in R 4.0.3, I obtain different coefficients before the variables as well as omega variable is different:
...
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37 views
Asset bubbles and empirical findings for monetary stimulus' effect on productivity
It may be fairly empirical that leveraged investments can cause "asset bubbles" that often result in really highly priced assets (which I'll refer to as the ("leverage argument") --...
2
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0answers
157 views
Arellano and Bond (1991) or Blundell and Bond (1998) in R estimation
I have the following problem with the Arellano and Bond (1991) or Blundell and Bond (1998) estimators in R using the plm package. I receive the following problem when trying to run the needed ...
2
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2answers
86 views
Are prices part of total factor productivity?
I am trying to understand how production is related to income/profit and where do prices enter. Suppose there is a single firm with a Cobb-Douglas production technology:
$$Y=AK^{\alpha}L^{\beta}$$
...
1
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1answer
57 views
TFP in R via estprod package
I want to calculate the TFP by using the estprod function (I use R 4.0.2). As far as I understood the only way to calculate the TFP is manual following this logic .
...
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0answers
18 views
Which diagnostic tests are suitable for Measuring Total Factor Productivity (TFP)?
I did the TFP estimation with Levinsohn Petrin (in R) but I have doubts about the diagnostic tests e.g. I know that the estimation of autocorrelation in residuals has to be done (it would be very ...
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1answer
142 views
TFP estimation in R by using prodest and estprod packages
I am writing my Bachelor Thesis and I really need help with the TFP estimation. so far I have a dataset with log values of Value added (va), Labour (l), Capital (k), and Materials (m). The initial ...
0
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1answer
48 views
Can demand side restrictions explain the productivity paradox (Solow paradox)?
Productivity paradox https://en.wikipedia.org/wiki/Productivity_paradox is the name for the slow productivity growth (i.e. slow GDP growth) of the developed economies despite the robotics, AI, ...
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38 views
Data on labour productivity in India
I am trying to find historical data at the district, or ideally at the city-level on labour productivity (by sector, with a special focus on agriculture) or perhaps data on a similar measure?
1
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1answer
29 views
Measurement for the downstream use of a commodity
I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
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2answers
114 views
Why labor-augmenting technological progress increases employment and wages?
My textbook says that advances in technology typically raise the marginal product of labor and shift the labor demand curve to the right and calls it labor-augmenting technological advances. The book ...
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86 views
CES aggregator for intermediates with heterogeneous productivity
I'm following Atkeson, Burstein (2019 JPE), and cannot understand the aggregation result.
There is measure $M(z)$ of firms with productivity $z$, with production function
$$
y(z) = z k(z)^\alpha l(z)^...
0
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1answer
42 views
Low oil price and impact
Today I read an artcicle about the falling oil price (maybe it'll go under 30$ per barel the next days). Why is this a bad news? Lower oil price can give an advantage for a higher productivity.
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1answer
50 views
How would increase labor productivity lead to improved living standards of people in an economy?
I would like to know more about the mechanisms through which higher labor productivity would translate into higher living standards for a population in a given economy.
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1answer
60 views
Measuring productivity with the Törnqvist index
I have a sample of companies, of which I want to calculate the productivity of each individual firm relative to a hypothetical firm in the industry.
Choosing the measurement method was not easy, but ...
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1answer
20 views
What is the average percent of value an employee makes which he gets on salary (called)?
I'm looking for any statistics showing the average percent of money employees get from the monetary value they create, primarily from the US or EU. Is there a term for this ratio?
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1answer
41 views
BreakEven/productivity/salary/employees
If employees’ salaries are increased by 20%, what is the increase in productivity required to break even?
Can someone assist me in solving this question?
Productivity = (output per period)/(number ...
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2answers
29 views
Are there any economic theories around the concept of companies focusing on that which is easier to calcuate?
A lot of the organisations I have worked for have focused on that which is easy to calculate.
For example, direct cost savings are often easy to calculate, but analysing the wider implications of a ...
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2answers
77 views
When does the law of diminishing returns apply?
Law of diminishing returns does not always apply:
The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant, ...
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2answers
5k views
Does recycling lead to fewer jobs?
Say I buy a glass bottle, I can either put it in the landfill or recycle it.
My understanding is, glass will breakdown into sand. (Not sure how well though, since we sometimes find glass from Roman ...
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2answers
40 views
Persistent changes in relative prices due to productivity differences
I read a couple of years ago that in the long run (in centuries) the relative price between, say, schooling and agriculture keeps increasing, since the latter sector gets more and more productive, ...
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1answer
40 views
Why is increased productivity infinitely good
From investopedia:
Supply rises with productivity, dropping real prices and increasing
real wages; it lifts people out of poverty and allows them to focus on
efforts beyond mere survival.
I ...
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0answers
17 views
Is the definition of Investment variable in Economics?
I studied that Investment is the expenditure incurred on the procurement of such goods that would help us in production of goods and services.
And mainly consists of Fixed and Inventory Investment
...
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2answers
158 views
Can we see the computer age in the productivity statistics?
Robert Solow famously said:
You can see the computer age everywhere but in the productivity statistics
This quote is often linked with the productivity paradox (https://en.wikipedia.org/wiki/...
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1answer
62 views
Total factor productivity and revenue
On page 116 of The British Industrial Revolution in Global Perspective Robert Allen writes
"...the total factor productivity of enclosed farms was 18 per cent
higher than that of open fields. If ...
1
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1answer
167 views
Tax system is progressive or regressive
Let´s discuss a little!
When the direct effect of a tax or transfer policy (compared to what would happen in the absence of the policy) is a reduction in inequality, it is called progressive policy. ...
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0answers
48 views
How can the number of hairdressers in the UK be up 50% since 2010?
In this recent article, The Economist argues that one of the reasons behind the anaemic recent wage growth in Britain is that the recent job growth has been concentrated in lower-productivity jobs and ...
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3answers
69 views
What's a product that historically has always had the same value, and probably will in the future?
Money usually has inflation tied to it, but is there a product that has stayed around the same value world wide for a very long time, and probably will for a very long time as well (something like 100 ...
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2answers
287 views
Empirical explanation on divergence between productivity and wages since the 70s
There is a well know graph, that shows a tight link between productivity and wages, until the 70s, and a break of the link since:
There's a lot of possible explanations for this, I keep hearing more ...
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2answers
31 views
2 firms production decision for one agent
I'm trying to solve the optimal production $\{x,y\}$ for a risk neutral agent with weight $w$ in firm $X$ and weight $1-w$ in firm $Y$. Each firm has marginal cost $c^X$ and $c^Y$ respectively. The ...
2
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1answer
70 views
Does credit really help an economy?
I'm reading Ray Dalio's How the Economic Machine Works, and although I understand the role of credit in an economy, I don't understand whether credit actually adds any value to an economy.
Ray says ...
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1answer
45 views
Are slacks the same as mix-inefficiency?
On the diagram below it is stated that A' has input slacks as it could reduce the amount of $x_2$ and still be on the frontier (by moving to C). However I recall mix-inefficiency having a similar ...
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2answers
284 views
Inclusion of firms on the efficient frontier of a Production Possibility Set
I'm working through Cooper's Data Envelopment Analysis, and they are going over Production Possibility Sets.
They present 9 firms, each with two inputs and one output:
Graphically it easy to see why ...
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3answers
73 views
GDP per Installed Computing Facilities
I would like to quantify the importance of computing power for economic aggregate output in an economy in a "simple" GDP-to-installed-CPU ratio.
The idea is to calculate a measure similar to GDP-to-...
