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Revue de l'OFCE

2006/5 (no 97 bis)

Article précédent Pages 217 - 233 Article suivant



The stability of capital lifespan over time is a key assumption of growth accounting studies. However, many empirical works refute this hypothesis and suggest that the average service-life of capital goods has shown a decrease in the advanced economies since the 1970s. I show in this paper that this acceleration in capital obsolescence could strongly impact on traditional measures of Total Factor Productivity. For instance, a moderate increase in the capital retirement rate since the early 1970s could explain almost all the productivity slowdown observed in the US economy in the period 1974-2000.
JEL Classification: C80, E17, O47.


  • capital obsolescence
  • total factor productivity
  • productivity slowdown
  • mismeasurement hypothesis

Plan de l'article

  1. Introduction
  2. Growth Accounting and the US Productivity Slowdown
  3. The Mismeasurement Hypothesis
  4. Lessons from Few Numerical Exercises
  5. Conclusion
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