Forecasting Aggregate Productivity Using Information from Firm-Level Data

Tinbergen Institute Discussion Paper No. 09-043/3

47 Pages Posted: 14 May 2009 Last revised: 10 Apr 2017

See all articles by Eric J. Bartelsman

Eric J. Bartelsman

Vrije Universiteit Amsterdam; Tinbergen Institute; IZA Institute of Labor Economics

Zoltan Wolf

U.S. Census Bureau - Center for Economic Studies

Date Written: May 14, 2009

Abstract

This paper contributes to the productivity literature by using results from firm-level productivity studies to improve forecasts of macro-level productivity growth. The paper employs current research methods on estimating firm-level productivity to build times-series components that capture the joint dynamics of the firm-level productivity and size distributions. The main question of the paper is to assess whether the micro-aggregated components of productivity - the so-called productivity decompositions - add useful information to improve the performance of macro-level productivity forecasts. The paper explores various specifications of decompositions and various forecasting experiments. The result from these horse-races is that micro-aggregated components improve simple aggregate total factor productivity forecasts. While the results are mixed for richer forecasting specifications, the paper shows, using Bayesian model averaging techniques (BMA), that the forecasts using micro-level information were always better than the macro alternative.

Keywords: Economic growth, production function, total factor productivity, aggregation, firm-level data data, Bayesian analysis, forecasting

JEL Classification: C11, C14, C32, C33, D24, O12, O47

Suggested Citation

Bartelsman, Eric J. and Wolf, Zoltan, Forecasting Aggregate Productivity Using Information from Firm-Level Data (May 14, 2009). Tinbergen Institute Discussion Paper No. 09-043/3. Available at SSRN: https://ssrn.com/abstract=1404564 or http://dx.doi.org/10.2139/ssrn.1404564

Eric J. Bartelsman (Contact Author)

Vrije Universiteit Amsterdam ( email )

Amsterdam, ND North Holland
Netherlands
+31 (0)20 44 46044 (Phone)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Zoltan Wolf

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
68
Abstract Views
650
rank
332,785
PlumX Metrics