Input measurement and productivity growth in Japanese and U.S. manufacturing: Comment.

Economists J.R. Norsworthy and David H. Malmquist have presented interesting comparisons of productivity growth in the Japanese and the U.S. manufacturing sectors. Their paper starts with the discussion of whether the conventional value-added or gross national product (GNP) measurement of output is an appropriate framework for productivity analysis. Some confusion frequently arises as to whether a production function should he structured on the basis of gross output or value-added output. Separability is a pivotal concept in the analysis of production structures, especially in relation to the existence of a real value-added aggregate. It is well known that there are two types of separability, which pertain to the existence of a real value-added function: weak separability and strong partial separability. The practical advantage of distinguishing these two different forum of separability is that the double-deflation method in conventional GNP accounting is justified only when strong partial separability holds.