The real exchange rate own income share decreases sufficiently.22 (et), on the other hand, fell almost continu- The sign and the size of the impact of ously for the first three decades, to reach a changes in the terms of trade and the real level of about 46 per cent below its initial exchange rate on the marginal product of level by 2003, thus revealing a very sub- labour depend on the so-called S. [...] The in- the graph, we first show the path of TFP dex, set to unity in 1970, reaches a level of (Rt); this line is next augmented by the 1.564 by the end of the sample period; this path of the capital-deepening contributing implies an annual average contribution to factor (Kt) to obtain the path of average growth of about 0.92 percentage points. [...] In labour productivity in terms of real GDP the second column we report our estimates (AY,t); next we have added the contribu- of the contribution of capital deepening, tion of the trading gains to obtain the path Kt, as given by (23): its contribution over of average labour productivity in terms of the sample period is nearly as important as real GDI (AZ,t); finally, multiplying by the that of TF. [...] The As shown above, trading gains are im- sixth column of the table shows the value of portant not just for the measurement of SL,t: it increased by about one tenth over real GDI and the determination of ag- the course of the last half-century. [...] In fact, when it comes to plete since they exclude the relative-price the marginal productivity of labour, defin- effect resulting from a change in the price ing the real wage in terms of anything but of the chosen trade-account deflator rela- the purchasing power of domestic income tive to the price of domestic final goods.
- Pages
- 24
- Published in
- Canada
