NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Productivity Growth and Changes in the Terms of Trade in Japan and the U.S.

Catherine J. Morrison, W.E. Diewert

NBER Working Paper No. 1848 (Also Reprint No. r0937)
Issued in March 1986
NBER Program(s):   PR

In this paper we employ a recently proposed procedure (Dlewert and Morrison[1985]) for adjusting real domestic product and productivity for changes in a country's terms of trade. We apply this procedure to a comparison of two major industrialized countries, the U.S. and Japan. The approach is based on assessing the impact on, alternatively, production or final sales to domestic purchasers, of changes in terms of trade and the balance of payments deficit in a consistent accounting framework. This treatment of international trade allows for comparative statics analysis based only on production theory. The comparison is carried out for a relatively open economy, Japan, with an economy that may not be as vulnerable to terms of trade changes, the U.S. for the years 1967 to 1982.

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Document Object Identifier (DOI): 10.3386/w1848

Published:

  • Diewert, W.E. and Catherine J. Morrison. "Adjusting Output and Productivity Indexes for Changes in the Terms of Trade," Economic Journal, Vol. 96, September 1986, pp. 659-679. ,
  • "Productivity Growth in Japan and the United States," Studies in Income and Wealth, Vol. 53, ed. Charles R. Hulten, pp. 201-227. Chicago: Universityof Chiacgo Press, 1991.

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