Productivity Measurement: Racing to Keep Up

49 Pages Posted: 19 Feb 2019 Last revised: 4 Mar 2019

Multiple version iconThere are 2 versions of this paper

Date Written: February 2019


This paper provides a non-technical review of the literature and issues related to the measurement of aggregate productivity. I begin with a discussion of productivity measures, their performance in recent decades, and key measurement puzzles that emerge from the data. The remainder of the review focuses on two important questions. First, how do we make more accurate the measures of prices used to deflate nominal output so as to win (or at least not lose) the race for economic measurement to keep up with a changing economy? This section frames the issues and points to the most important and promising areas for further research. Second, what does or should GDP measure? I defend GDP as a valuable measure of production and offer suggestions for improving it. At the same time, I emphasize the importance of measuring economic welfare (well being) and highlight the value of supplementing GDP with a satellite account that measures economic welfare.

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Suggested Citation

Sichel, Daniel E., Productivity Measurement: Racing to Keep Up (February 2019). NBER Working Paper No. w25558. Available at SSRN:

Daniel E. Sichel (Contact Author)

Wellesley College ( email )

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Wellesley, MA 02181
United States

NBER ( email )

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