TY  - JOUR
AU  - Hulten,Charles R.
TI  - What is Productivity: Capacity or Welfare Management?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3970
PY  - 1992
Y2  - January 1992
UR  - http://www.nber.org/papers/w3970
L1  - http://www.nber.org/papers/w3970.pdf
N1  - Author contact info:
Charles R. Hulten
Department of Economics
University of Maryland
Room 3105, Tydings Hall
College Park, MD 20742
Tel: 301/405-3549
Fax: 301/405-3542
E-Mail: hulten@econ.umd.edu
AB  - A number of recent papers have examined the role of environmental variables in accounting for economic growth, and have concluded that net measures of national product are superior to gross measures in portraying the outcome of the growth process. This paper argues that the two measures are not substitutes, but complements which reveal different aspects of economic growth: gross product is the output concept for estimating the structure of production. while net product is the correct concept for getting at the welfare consequences of economic growth. It is then shown that this capacity-welfare nexus is mirrored in the Hicksian and Harrodian definitions of technical change. An alternative to the conventional Solow growth accounting framework is presented in which the change in national wealth is decomposed into components corresponding to labor input and the Harrodian rate of technical change.
ER  -