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Chilean Productivity Growth Decomposition by Demand Component Based on Input Output Tables 1996 and 2003

Using the Leontief inverse matrix derived from Chilean Central Bank input-output tables of the System of National Account we calculated the amount of labor directly and indirectly required to produce one physical unit of each commodity. If the share of various items in total consumption is used as the weight, the reciprocal of the weighted average of this amount of labour can be defined as the labour productivity of the consumption good and we can derive the labor productivity of the composition ratios of investment and export as well. As a result, the analysis leads us to conclude that the productivity growth of the Chilean economic structure during the transition period was led by export during the first part of the period until 1996 and it was an investment biased productivity growth in the second part of the period until 2003. However the demand growth was lead by export during the whole period.