Aggregation of Economic Growth Rates and of its Sources

In this paper we consider the question of measuring aggregate economic growth and its sources. We derive a theoretically justified solution for aggregating (across firms, industries, countries, etc.) growth rates and their sources within the framework of Solow?s (1957) growth accounting method. The resulting aggregation scheme turns out to be quite intuitive and, in fact, the one that is sometimes, in an ad hoc way, used in practice, and so the main value of our work is that our formal derivations clearly show under what conditions this scheme is theoretically justified. We also provide a small empirical illustration of our method on the real data set and show how different the conclusions can be depending on the aggregation scheme used.

Growth Rates Preservation (GRP) temporal benchmarking: Drawbacks and alternative solutions

Benchmarking monthly or quarterly series to annual data is a common practice in many National Statistical Institutes. The benchmarking problem arises when time series data for the same target variable are measured at different frequencies and there is a need to remove discrepancies between the sums of the sub-annual values and their annual benchmarks. Several benchmarking methods are available in the literature. The Growth Rates Preservation (GRP) benchmarking procedure is often considered the best method. It is often claimed that this procedure is grounded on an ideal movement preservation principle. However, we show that there are important drawbacks to GRP, relevant for practical applications, that are unknown in the literature. Alternative benchmarking models will be considered that do not suffer from some of GRP\u2019s side effects

Core inflation in the Euro area : evidence from the structural VAR approach

Against the difficult background of analysing aggregated data in this paper core inflation in the euro area is estimated by means of the structural vector autoregressive approach. We demonstrate that the HICP sometimes seems to be a misleading indicator for monetary policy in the euro area. We furthermore compare our core inflation measure to the wide-spread "ex food and energy" measure, often referred to by the ECB. In addition we provide evidence that our measure is a coincident indicator of HICP inflation. Assessing the robustness of our core inflation measure we carefully conclude that it seems to be quite reliable. This Version: April, 2002 Revised edition published in: Allgemeinenes Statistisches Archiv, Vol 87, 2003. Klassifikation: C32, E3

On Productivity Measurement and Interpretation: Some Insights on Italy in the European Context. LEQS Paper No. 142/2019 March 2019

Over the period 1995–2016, the Italian performance in terms of productivity was poor in historical terms and in comparison with its main international partners. This issue goes beyond Italy, with declining productivity growth observed, from the second half of the nineties, in several other advanced economies. Possible explanations for the slowdown include factors such as lower capital investment by firms, decreased competition, excessive regulation, and capital misallocation. The diffuse slowing rates of measured productivity growth has also raised questions on whether GDP and output current compilation methods are adequate (i.e. the mis-measurement hypothesis). The “ICT revolution” has created new ways of exchanging and providing goods and services as result of increased connectivity. These developments challenge the way economic activity is traditionally measured. There are also measurement problems associated with estimating output and input volumes especially related to the quality of price indexes for some products and services. These problems have an impact on productivity estimates and might impair international comparability. In this paper, we intend to investigate what the core problems in productivity measurement and interpretation are in the European context, with a specific focus on Italy

Aggregation Issues in Integrating and Accelerating BEA's Accounts: Improved Methods for Calculating GDP by Industry

Aggregate measures of real GDP growth obtained from the GDP by Industry Accounts often differ from the featured measure of real GDP growth obtained from the National Income and Product Accounts (NIPAs). We find that differences in source data account for most of the difference in aggregate real output growth rates; very little is due to the treatment of the statistical discrepancy, differences in aggregation methods, or the contributions formula. Moreover, we demonstrate that with consistent data, use of BEA's Fisher-Ideal aggregation procedures to aggregate value added over industries yields the same estimate of real GDP as aggregation over final commodities. Thus, two major approaches to measuring real GDP -- "expenditures" approach used in the NIPAs and the "production" or "industry" approach used in the Industry Accounts -- give the same answer under certain conditions. This result enables us to show that the "exact contributions" formula that the NIPAs use to calculate commodity contributions to change in real GDP can also be used to calculate consistent industry contributions to change in real GDP. We also find that using some newly developed datasets would help to bring the aggregate real output measures into closer alignment.

An intersectoral analysis of the secular productivity slowdown

Labor productivity ; Capital investments

City Systems: Building Blocks for Achieving Sustainability and Creating Good Jobs

In this issue brief, we examine three different systems that underlie cities and keep them running: water, waste, and energy. Within each of these systems are opportunities for states and cities to modernize their local infrastructure, improve their communities, and ultimately create jobs

How Do Output Growth Rate Distributions Look Like? Some Time-Series Evidence on OECD Countries

This paper investigates the statistical properties of within-country GDP and industrial production (IP) growth rate distributions. Many empirical contributions have recently pointed out that cross-section growth rates of firms, industries and countries all follow Laplace distributions. In this work, we test whether also within-country, time-series GDP and IP growth rates can be approximated by tent-shaped distributions. We fit output growth rates with the exponential-power (Subbotin) family of densities, which includes as particular cases both the Gaussian and the Laplace distributions. We find that, for a large number of OECD countries including the U.S., both GDP and IP growth rates are Laplace distributed. Moreover, we show that fat-tailed distributions robustly emerge even after controlling for outliers, autocorrelation and heteroscedasticity