Inter-industry Distribution of Productivity Gains

In an input–output framework the gains of total factor productivity or the benefits of process innovation can be measured as a reduction in time of the total cost per unit of output, for any industry, when costs and outputs are measured at constant prices. These benefits are distributed to the economic agents (consumers, suppliers, workers, capital owners) through changes in prices, reflecting the structure of the different markets for products and for primary inputs. Theoretical considerations about this process of distribution of the benefits of innovation are complemented with computations related to the evolution of the Spanish economy between 1975 and 1980.