Effects of Terms of Trade Gains and Tariff Changes on the Measurement of U.S. Productivity Growth. Rob Feenstra, UC Davis Marshall Reinsdorf, BEA Matt Slaughter, Dartmouth 2008 World Congress on National Accounts and Economic Performance Measures for Nations Rosslyn, Virginia May 13, 2008.
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Rob Feenstra, UC Davis
Marshall Reinsdorf, BEA
Matt Slaughter, Dartmouth
2008 World Congress on National Accounts and Economic Performance Measures for Nations
May 13, 2008
where D = C+I+G, “gross domestic purchases” or “domestic absorption.”
Terms of Trade defined as PX/PM,where PGDPsDPD + sXPx – sMPM.
Change in Terms of Trade from PP to P Measurement of U.S. Productivity Growth ¢P¢ Reduces Real Consumption from D to D¢ but Shift in Production from A to A¢ has no Effect on Real GDP
BEA aggregates Laspeyres indexes from BLS to find deflators for exports/imports in GDP.
We calculate alternative versions of the indexes used by BEA to construct deflators.
To aggregate our indexes, we use weights from the NIPAs and Fisher index formula.
Removing nonmarket sectors of GDP leaves Value Added of Private Business, the output part of aggregate productivity calculation.
Törnqvist rather than Laspeyres formula for deflators of trade components of GDP.
Tariff-inclusive weights and index for M.
Adjust PM for net entry of new countries supplying imports using CES formula.