Total factor productivity and relative prices: the case of Italy

Giorgio Garau; Giorgio Garau

doi:10.3934/NAR.2022002

National Accounting Review

2022, Volume 4, Issue 1: 16-37. doi: 10.3934/NAR.2022002

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Research article

Total factor productivity and relative prices: the case of Italy

Giorgio Garau ^,

Department of Humanities and Social Sciences, University of Sassari, Via Roma 151, Italy

Received: 04 November 2021 Revised: 17 December 2021 Accepted: 17 January 2022 Published: 26 January 2022
JEL Codes: C67, D24, D57, E31

In his seminal work, Fontela (1989) set up the distributional rule of productivity gain in the input–output context (total factor productivity surplus, TFPS). Garau (1996) proposed an extension, to identify a measure of surplus, called purchasing power transfer (PPT). This measure is given by the productivity gains and market surplus generated by the extra-profit conditions derived from the rental positions detained by agents. Such a decomposition is useful because it provides information about the degree of non–competitiveness in different markets. In this paper, we compute and explain Fontela's (1989) TFPS by comparing it with Garau's (1996) PPT for Italy over 2009–2014.
- Input-output,
- total factor productivity surplus,
- relative prices
Citation: Giorgio Garau. Total factor productivity and relative prices: the case of Italy[J]. National Accounting Review, 2022, 4(1): 16-37. doi: 10.3934/NAR.2022002

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Abstract

In his seminal work, Fontela (1989) set up the distributional rule of productivity gain in the input–output context (total factor productivity surplus, TFPS). Garau (1996) proposed an extension, to identify a measure of surplus, called purchasing power transfer (PPT). This measure is given by the productivity gains and market surplus generated by the extra-profit conditions derived from the rental positions detained by agents. Such a decomposition is useful because it provides information about the degree of non–competitiveness in different markets. In this paper, we compute and explain Fontela's (1989) TFPS by comparing it with Garau's (1996) PPT for Italy over 2009–2014.

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