MEASURING MULTI-FACTOR PRODUCTIVITY WHEN RATES OF RETURN ARE EXOGENOUS

views of the OECD or its Member countries. The author thanks Erwin Diewert and Chuck Hulten for their helpful commets. Special thanks go also to Mathilde Mas (University of Valencia and IVIE) for many useful discussions on the subject. 2 This paper discusses the computation of capital services measures with user cost expressions that employ exogenous rates of return, as well as expected depreciation and expected asset price changes. One consequence of this formulation is that total capital remuneration does not necessarily equal non-labour income as given by the national accounts. The paper proposes several interpretations of this discrepancy, discusses implications for MFP measures and growth accounting and puts forward one preferred productivity measure. The methods are implemented empirically for four OECD