Productivity Research Notes (PRN Series), No. 2608. This note examines the implications of Fiji’s 2019 national accounts rebasing for the measurement of value added and productivity. While GDP at market prices was revised downward, a larger decline in net taxes on products led to an upward revision in GDP at basic prices. With compensation of employees largely unchanged, the adjustment increases the measured capital income share. As productivity measurement relies on value added and its income components, such revisions affect growth accounting results. In Fiji, where labor input has grown faster than capital, the revision tends to reinforce the recent improvement in measured total factor productivity (TFP), although part of this may reflect demand-side factors. These findings highlight the importance of accurate tax measurement in national accounts.
Koji Nomura (Sat,) studied this question.