Multifactor Productivity in Canada: An Evaluation of Alternative Methods of Estimating Capital Services
John R. Baldwin
Statistics Canada - Microeconomic Analysis Division
Government of Canada - Micro-Economic Analysis Division
April 4, 2007
The Canadian Productivity Review, Catalogue No. 15-206-XIE, No. 009, 2007
This paper examines the effects of alternative specifications of the user costs of capital on the estimated price and volume indices of capital services. It asks how sensitive the results are to the use of exogenous versus endogenous rates of return, to alternate ways of including capital gains, and to whether corrections are made for tax rates. The paper also examines the effect of the various user cost formulae on the measured multifactor productivity growth.
Number of Pages in PDF File: 53
Keywords: multifactor productivity, capital services, rental price of capital
JEL Classification: D24, J24, O47, E22, H54
Date posted: November 18, 2009
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