TY  - JOUR
AU  - Comin,Diego
TI  - Using Investment Data to Assess the Importance of Price Mismeasurement
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10627
PY  - 2004
Y2  - July 2004
UR  - http://www.nber.org/papers/w10627
L1  - http://www.nber.org/papers/w10627.pdf
N1  - Author contact info:
Diego A. Comin
Harvard Business School
Soldiers Field
Boston, MA 02163
Tel: 617/495-5011
E-Mail: dcomin@hbs.edu
AB  - This paper presents a new approach to assess the role of price mismeasurement in the productivity slowdown. I invert the firm's investment decision to identify the embodied and disembodied components of productivity growth. With a Cobb-Douglas production function, output price mismeasurement only should affect the latter. Contrary to the mismeasurement hypothesis, I find that in the Post-War period, disembodied productivity grew faster in the hard-to-measure than in the non-manufacturing easy-to-measure sectors, and that disembodied productivity slowed down less in the hard-to-measure than in the easy-to-measure sectors since the 70's. These results hold a fortiori when capital and labor are complements.
ER  -