This study is concerned with the conceptual and measurement problems which arise in comparisons of levels of per capita output and productivity in different countries. The author stresses the reliance of standarized valuations of the different elements of output rather than official exchange rates when making comparisons. Two approaches are noted; (1) the expenditure approach and (2) the production approach. The production approach, discussed here, looks at the industry of origin and provides a basis for growth accounting, comparative structural analysis, studies of technological performance, and work on labor productivity and total factor productivity. This approach provides a sounder base for constructing relative indicators of productivity. It also reveals trade protection policies and their incidence on different sectors of the economy. The approach shows which data are anomalous and which analytically useful in industrial census. It also shows how new insights might be gained by exploiting some official sources which often remain untapped by international agencies.
