The Deviation Terms in the Decomposition of Aggregate Productivity Growth
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In the decomposition of aggregate productivity growth, corresponding components are generally indexed according to the deviation of individual-level productivity from aggregate productivity. This paper provides an alternative perspective and points out that this decomposition method seems more suitable for studying change in relative aggregate productivity growth than for aggregate productivity growth when a deviation term is adopted.
Abstract
In the decomposition of aggregate productivity growth, corresponding components are generally indexed according to the deviation of individual-level productivity from aggregate productivity. This paper provides an alternative perspective and points out that this decomposition method seems more suitable for studying change in relative aggregate productivity growth than for aggregate productivity growth when a deviation term is adopted.
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