Re: Productivity.

["Devine, James" <jdevine@xxxxxxx>]

strictly speaking, labor productivity isn't (domestic output)/(domestic labor input). Rather, it's (domestic value added)/(domestic labor input), where value added = domestic output minus intermediate goods input. 

BTW, it sure looks like the concept of "value added" is very similar to Marx's  S+V.

------------------------
Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine




> -----Original Message-----
> From: PEN-L list [mailto:PEN-L@xxxxxxxxxxxxxxxx]On Behalf Of Diane
> Monaco
> Sent: Wednesday, July 14, 2004 10:57 AM
> To: PEN-L@xxxxxxxxxxxxxxxx
> Subject: Re: [PEN-L] Productivity.
> 
> 
> Doug wrote:
> >Diane Monaco wrote:
> >
> >>Dmytri, foreign inputs don't appear to be ignored in the 
> formula you've
> >>given above, but I would definitely agree with you that as 
> cheaper foreign
> >>labor inputs displace domestic labor inputs, "productivity" 
> would rise.
> >
> >A productivity guy at the BLS told me that foreign labor inputs would
> >be counted as foreign production as well, with little impact on the
> >productivity figures.
> 
> Would have little impact on which productivity figures, Doug? 
>  If foreign
> labor inputs are "displacing" domestic labor inputs, and 
> domestic labor
> inputs are counted in domestic productivity figures, wouldn't 
> there be an
> impact on domestic productivity figures?
> 
> (domestic labor productivity)=(domestic output)/(domestic labor input)
> 
> ...so if "domestic labor input" goes down and if domestic 
> output stays the
> same or increases...then domestic labor productivity will go up.
> 
> I'm thinking that the BLS productivity person you refer to 
> was suggesting
> that foreign labor inputs don't "directly" enter domestic labor
> productivity formulas as Dmytri originally suggested in the previous
> post...and I would agree.  Just a thought.
> 
> Thanks,
> Diane
>