Measuring productivity increase by long-run prices: The early analyses of G.R. Porter and R. Giffen

Opocher, Arrigo (2009): Measuring productivity increase by long-run prices: The early analyses of G.R. Porter and R. Giffen.

Abstract

The 19th century economic commentators did not possess a formal measure of the rate at which productivity was increasing during the industrial take-off. Yet they did develop an intuitive method based on the comparative change in prices and wages. This paper reviews the contributions of G.R. Porter and R. Giffen and, in the light of some modern contributions, presents an assessment of their rationality and improvability under current standards. It is argued, in particular, that a proper measure of industrial productivity increase based on the change in real earnings rates is the mathematical dual of a Solovian measure of the industrial Total Factor Productivity growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: productivity growth; TFP: cost function; real wages; income distribution.
• Subjects: D - Microeconomics > D3 - Distribution > D33 - Factor Income Distribution; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B16 - Quantitative and Mathematical; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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