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The D utch G rowth A ccounts: Measuring Productivity with Non‐Zero Profits
Author(s) -
Haan Mark,
Veldhuizen Erik,
Tanriseven Murat,
RooijenHorsten Myriam
Publication year - 2014
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12140
Subject(s) - economics , growth accounting , return on capital , capital intensity , endogenous growth theory , capital (architecture) , capital deepening , productivity , capitalization , rate of return , physical capital , econometrics , total factor productivity , macroeconomics , financial capital , capital formation , microeconomics , finance , human capital , history , archaeology , economic growth , profit (economics) , linguistics , philosophy
Since 2007 S tatistics N etherlands has been publishing multifactor productivity statistics at the macro and industry branch level. Updates of these statistics are annually released in S tat L ine, the online statistical database of S tatistics N etherlands. In contrast to most other growth accounting exercises, the official growth accounts of S tatistics N etherlands employ an exogenous rate of return to capital to calculate capital services. As a consequence, in the D utch G rowth A ccounts output does not necessarily match total production costs. Supplementary to the exogenous model, S tatistics N etherlands also publishes growth accounts based on endogenous rates of return. The aim of this paper is to investigate the effects of scaling up capital measurement on input cost shares, contributions to output growth, and productivity, applying both the exogenous and endogenous models. The results show that endogenous rates of return to capital are less applicable in growth accounts in which the coverage of capital is restricted to fixed assets only. The rates of return to capital converge when expanding the capital inputs with additional assets such as land, inventories, and subsoil assets. But this is not necessarily true for the capital contributions to economic growth. Finally, the capitalization of a wider range of intangible assets, beyond the SNA boundaries, has particularly for the 1995–2001 period a significant effect on the D utch G rowth A ccounting results, irrespective of using either an exogenous or an endogenous rate of return to capital.