Working Paper: CEPR ID: DP15402
Authors: Diego Comin; Javier Quintana Gonzalez; Tom Schmitz; Antonella Trigari
Abstract: We compute new estimates for Total Factor Productivity (TFP) growth in five European countries and in the United States. Departing from standard methods, we account for positive profits and use firm surveys to proxy for unobserved changes in factor utilization. These novelties have a major impact in Europe, where our estimated TFP growth series are less volatile and less cyclical than the ones obtained with standard methods. Based on our approach, we provide annual industry-level and aggregate TFP series, as well as the first estimates of utilization-adjusted quarterly TFP growth in Europe.
Keywords: Total Factor Productivity; Utilization Adjusted TFP Growth; European Economies; Firm Surveys; Economic Policy
JEL Codes: E01; E30; O30; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Utilization-adjusted TFP growth in Europe (O52) | TFP growth (O49) |
| Positive profits (D33) | TFP growth (O49) |
| Incorporation of profits in calculations (G35) | Aggregate TFP growth estimates in the United States (O47) |
| Capacity utilization surveys (E23) | Utilization measure (L97) |