ILPC 2027

Analytically, at a macroeconomic level, productivity gains are measured by the following ratio : variation of real output over input. Yet, to measure the so-called "real output", National Accounts need appropriate deflators. I defend the idea according to which measuring an appropriate deflator to get a "real output" is more and more problematic. 

From a socio-economic perspective, this article presents and explains the main issues of measurement of the deflator (price index) and their impact on productivity. 

It analyses major changes that have occurred over time in the way the price index is constructed in France. Analyzing the various controversies, both outward and more muffled, that have dogged the index throughout the 20th century, and into the first decades of the 21st century makes clear that the challenges have always had to do, though in different degrees, with the distribution and representation of wealth. The actors doing the challenging, however have dramatically changed. The political view, focuses on various social relationships among the government, statistical agencies and Unions, has gradually given way to the scientific view, which necessarily makes the most recent debates more technical in nature. With the new prominence given to "experts", the parties traditionally involved have tended to stay out of these debates. I also show that these controversies are embedded in a real world whose increasing complexity, differentiation and (rightful) concern with quality defy these tools, no matter how sophisticated they have become. 

I conclude in explaining the link between these political issues in Price Index and in Productivity measurement.