--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-42/trading-gains-and-productivity-a-tornqvist-approach/" title: "Trading Gains and Productivity: A Törnqvist Approach" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T08:01:59+00:00" date_modified: "2026-07-20T20:24:36+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2022" ipm_keyword: - "Canada" - "deflator" - "Diewert-Morrison" - "Kohli" - "productivity" - "real GDI" - "Switzerland" - "terms of trade" - "Törnqvist" - "trading gains" - "United States" ipm_research_theme: - "Measurement and methodology" - "Trade" ipm_country_focus: - "Canada" - "International" - "Switzerland" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Trading Gains and Productivity: A Törnqvist Approach Canonical URL: https://csls.ca/ipm-archive/ipm-issue-42/trading-gains-and-productivity-a-tornqvist-approach/ # Trading Gains and Productivity: A Törnqvist Approach [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-42-3-Kohli.pdf) Cite this article × Cite this article as: Kohli, Ulrich. 2022. “Trading Gains and Productivity: A Törnqvist Approach.” International Productivity Monitor, No. 42 (Spring 2022): 63–86. https://www.csls.ca/ipm-archive/ipm-issue-42/trading-gains-and-productivity-a-tornqvist-approach/ ## Author: - Ulrich Kohli Swiss National Bank ## IPM Issue 42 Spring 2022 pp. 63–86 ## Related IPM articles [Labour Productivity as a Measure of Technological Change Ulrich Kohli Fall 2025 | IPM Issue 49 | pp. 64–81](https://csls.ca/ipm-archive/ipm-issue-49/labour-productivity-as-a-measure-of-technological-change/) [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [Adult Skills and Productivity: New Evidence from PIAAC 2023 Dan Andrews, Balázs Égert, Christine de La Maisonneuve Fall 2025 | IPM Issue 49 | pp. 41–63](https://csls.ca/ipm-archive/ipm-issue-49/adult-skills-and-productivity-new-evidence-from-piaac-2023/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [De-industrialization and the Great Productivity Slowdown: What Comes Next? 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It strongly argues in favour of using the price of domestic final demand as a deflator when computing real Gross Domestic Income (GDI), and, by the same token, the trading gains and labour productivity measures. It shows that the trading gains then generally consist of two parts, a pure terms-of-trade component and an additional relative-price component, the latter of which can be interpreted as a real-exchange-rate effect. National and international statistical agencies, with the notable exceptions of Statistics Canada and the U.S. Bureau of Economic Analysis, tend to report incomplete trading-gain statistics in that they omit the second component. Consequently the real GDI estimates they publish must be viewed as flawed. Taking trading-gains into account has no direct effect on the measurement of total factor productivity, but it does affect the measures of average and marginal labour productivity when related to real GDI and its deflator. Numerical estimates for Switzerland are reported as an illustration. Cet article examine des mesures alternatives de Törnqvist du gain d’échange et des effets des termes de l’échange d’un pays, tels qu’ils ont été proposés dans la littérature depuis les travaux fondateurs de Diewert et Morrison (1986), et leur lien avec les mesures standard de la productivité. Il plaide fermement en faveur de l’utilisation du prix de la demande finale intérieure comme déflateur lors du calcul du revenu intérieur brut réel (RIBR), et, dans le même sens, des mesures du gain d’échange et de la productivité du travail. Il montre que les gains d’échange comprennent généralement deux parties : une composante pure des termes de l’échange et une composante supplémentaire de prix relatifs, cette dernière pouvant être interprétée comme un effet de taux de change réel. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-42-3-Kohli.pdf)