A model of labour productivity that distinguishes between permanent and transient shocks on productivity is proposed. We show that this model is a type of unobserved components model -- a random walk with drift plus noise model. The advantage of this approach is that it provides a coherent...

In this article, we set out a model of labour productivity which distinguishes between shocks which change productivity permanently and shocks which have transient affects on productivity. We show that this model is a type of unobserved components model -- a random walk with drift plus noise...

This article examines the manner in which labour services are modelled in the aggregate production function, concentrating on the relationship between numbers employed and average hours worked. It argues that numbers employed and hours worked are not perfect substitutes and that conventional...