Misallocation or Mismeasurement?

Revenue per unit of inputs differs greatly across plants within countries such as the U.S. and India. Such gaps may reflect misallocation, which lowers aggregate productivity. But differences in measured average products need not reflect differences in true marginal products. Pete Klenow is the Ralph Landau Professor in Economic Policy and the Gordon and Betty Moore Senior Fellow at the Stanford Institute for Economic Policy Research.

Publication

Image courtesy of interviewee

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