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In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. [1] Under some simplifying assumptions about the production technology, growth in TFP becomes the portion of growth in output not explained by growth in traditionally ...
The Solow residual measures total factor productivity, but the productivity variable is normally attached to the labor variable in the Solow-Swan model to make technological growth labor-augmenting. This type of productivity growth is required mathematically to keep the shares of national income accruing to the factors of production constant ...
where is the so-called total factor productivity. The Leontief production function applies to situations in which inputs must be used in fixed proportions; starting from those proportions, if usage of one input is increased without another being increased, the output will not change. This production function is given by
An explanation of the difference between efficiency and (total factor) productivity is found in "An Introduction to Efficiency and Productivity Analysis". [1] To complicate the meaning, operational excellence , which is about continuous improvement, not limited to efficiency, is occasionally used when meaning operational efficiency.
The accounting result is obtained by subtracting the weighted growth rates of the inputs from the growth rate of the output. In this case the accounting result is 0.015 which implies a productivity growth by 1.5%. We note that the productivity model reports a 1.4% productivity growth from the same production data.
Therefore, agricultural productivity is usually measured as the market value of the final output. This productivity can be compared to many different types of inputs such as labour or land. Such comparisons are called partial measures of productivity. [2] Agricultural productivity may also be measured by what is termed total factor productivity ...
This is reflected in total factor productivity and the Solow residual used in economic models called production functions that account for the contributions of capital and labor, yet have some unexplained contributor which is commonly called technological progress.
The following list of countries by labour productivity ranks countries by their workforce productivity. Labour productivity can be measured as gross domestic product (GDP) or gross national income (GNI) generated per hour.