Rethinking productivity: the crucial role of demand

Abstract

Building on the macroeconomic Cambridge capital controversies and issues regarding capital reversal, this article develops a novel microeconomic way of understanding productivity figures and demonstrates that thinking using a two-dimensional model corresponding to scale and pricing. The two-dimensional depiction enables a deeper understanding of the demand and supply forces that lie behind GVA figures, underscores that demand factors are critically important, and stimulates reflection on how the absence of aggregate demand in conventional supply-side productivity models perverts our understanding of the evolution of GDP productivity figures.

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Item Type:	Article
Authors/Creators:	Webber, D.J. https://orcid.org/0000-0002-1488-3436 Huaccha, G.
Copyright, Publisher and Additional Information:	© 2023 The Author(s). Published with license by Taylor & Francis Group, LLC. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
Keywords:	Productivity; GVA; Prices; Costs; Scale
Dates:	Accepted: 1 June 2023 Published (online): 15 June 2023 Published: January 2024
Institution:	The University of Sheffield
Academic Units:	The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield)
Depositing User:	Symplectic Sheffield
Date Deposited:	15 Jun 2023 16:36
Last Modified:	26 Apr 2024 09:38
Status:	Published
Publisher:	Taylor and Francis Group
Refereed:	Yes
Identification Number:	https://doi.org/10.1080/01603477.2023.2221667

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Rethinking productivity: the crucial role of demand

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