Produced and non-produced inputs: Once and for all?

Abstract

This note extends the notion of produced inputs to human capital services and shows that the measure of the productivity residual is nil when inputs are produced. The standard growth accounting literature often confuses the services of produced human capital services with the hours of work of skilled workers, explaining why attempts to mine out the productivity residual have failed. The note also criticizes the improper specification of technical progress in the production function when using produced inputs and suggests a reinterpretation of some often uses notions or expressions.