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The decoupling of median wages from productivity, sometimes known as the great decoupling, [1] is the gap between the growth rate of median wages and the growth rate of GDP per person or productivity. Erik Brynjolfsson and Andrew McAfee highlighted this problem toward the end of the twentieth century and the beginning of the twenty-first ...
Productivity growth is a crucial source of growth in living standards. Productivity growth means more value is added in production and this means more income is available to be distributed. At a firm or industry level, the benefits of productivity growth can be distributed in a number of different ways:
The Solow growth model is a model of economic development into which the Solow residual can be added exogenously to allow predictions of GDP growth at differing levels of productivity growth. The Balassa–Samuelson effect describes the effect of variable Solow residuals: it assumes that mass-produced traded goods have a higher residual than ...
where p is the labor productivity growth, Q the output growth (value-added), b is the Verdoorn coefficient and a is the exogenous productivity growth rate. [ 6 ] Verdoorn's law differs from "the usual hypothesis […] that the growth of productivity is mainly to be explained by the progress of knowledge in science and technology", [ 7 ] as it ...
The weighted growth rates of inputs (factors of production) are subtracted from the weighted growth rates of outputs. Because the accounting result is obtained by subtracting it is often called a "residual". The residual is often defined as the growth rate of output not explained by the share-weighted growth rates of the inputs. [7]: 6
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Baumol referred to the difference in productivity growth between economic sectors as unbalanced growth. Sectors can be differentiated by productivity growth as progressive or non-progressive. The resulting transition to a post-industrial society, i.e. an economy where most workers are employed in the tertiary sector, is called tertiarization.
Business leaders have a productivity problem. When it comes to measuring worker performance, organizations have usually relied on traditional productivity metrics to judge the success of an employee.