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What Does Total Factor Productivity Measure?

Author

Listed:
  • Richard G. Lipsey
  • Kenneth Carlaw

Abstract

In this article, as part of the symposium on total factor productivity, Richard G. Lipsey of Simon Fraser University and Kenneth Carlaw of the University of Canterbury in New Zealand provide a trenchant critique of the concept of total factor productivity. They conclude that "the degree of confusion surrounding TFP, particularly the assumption that low TFP numbers imply a low degree of technological dynamism, would seem to us to justify dropping the measure completely from all discussions of long term economic growth".

Suggested Citation

  • Richard G. Lipsey & Kenneth Carlaw, 2000. "What Does Total Factor Productivity Measure?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 1, pages 31-40, Fall.
    • Handle: RePEc:sls:ipmsls:v:1:y:2000:6
    as

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    File URL: http://www.csls.ca/ipm/1/lipsey-carlaw-e.pdf
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    File URL: http://www.csls.ca/ipm/1/lipsey-carlaw-f.pdf
    File Function: version en francais, pp:31-40
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    Citations

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    Cited by:

    1. Ceyhun Elgin & Selman Çakır, 2015. "Technological progress and scientific indicators: a panel data analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(3), pages 263-281, April.
    2. Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2021. "The Productivity Gap Among Major European Countries, USA and Japan," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(1), pages 59-78, March.
    3. Kiander, Jaakko & Berghäll, Elina, 2003. "The Finnish Model of STI Policy: Experiences and Guidelines. KNOGG Thematic Network WP4 Country Report - Finland," Discussion Papers 313, VATT Institute for Economic Research.
    4. Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2015. "The productivity gap among European countries," Working Papers 1510, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2015.
    5. Philippe Aghion & Antonin Bergeaud & Timo Boppart & Peter J. Klenow & Huiyu Li, 2019. "Missing Growth from Creative Destruction," American Economic Review, American Economic Association, vol. 109(8), pages 2795-2822, August.
    6. Arby, Muhammad Farooq, 2008. "Some Issues in the National Income Accounts of Pakistan (Rebasing, Quarterly and Provincial Accounts and Growth Accounting)," MPRA Paper 32048, University Library of Munich, Germany.
    7. Sarath Delpachitra & Pham Van Dai, 2012. "The Determinants of TFP Growth in Middle Income Economies in ASEAN: Implication of Financial Crises," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 11(1), pages 63-88, June.
    8. Richard Lipsey, 2001. "Successes and failures in the transformation of economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 8(2), pages 169-201.
    9. José Díaz‐Bahamonde & Gert Wagner, 2020. "Productivity and Growth in Perspective: Chile, 1833–2010," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 997-1030, December.
    10. Andrew Sharpe, 2002. "What Have We Learned About Productivity in the Last Two Decades?: A Review Article on New Developments in Productivity Analysis," International Productivity Monitor, Centre for the Study of Living Standards, vol. 4, pages 53-63, Spring.
    11. Abdoulaye Kané, 2022. "Measurement of total factor productivity: Evidence from French construction firms," EconomiX Working Papers 2022-9, University of Paris Nanterre, EconomiX.
    12. Centre for the Study of Living Standards, 2003. "Productivity Trends in Natural Resources Industries in Canada," CSLS Research Reports 2003-01, Centre for the Study of Living Standards.
    13. Sofiane Ghali & Pierre Mohnen, 2002. "TFP and Economic Potential of The Tunisian Economy," Working Papers 0225, Economic Research Forum, revised 05 Sep 2002.
    14. Bert Balk, 2003. "The Residual: On Monitoring and Benchmarking Firms, Industries, and Economies with Respect to Productivity," Journal of Productivity Analysis, Springer, vol. 20(1), pages 5-47, July.
    15. Santosh Kumar Sahu & Krishnan Narayanan, 2011. "Total Factor Productivity and Energy Intensity in Indian Manufacturing: A Cross-Sectional Study," International Journal of Energy Economics and Policy, Econjournals, vol. 1(2), pages 47-58, September.
    16. Andrew Sharpe, 2001. "Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress," International Productivity Monitor, Centre for the Study of Living Standards, vol. 3, pages 52-68, Fall.
    17. Andrew Sharpe & Olivier Guibaud, 2005. "Indicators of Innovation in Canadian Natural Resource Industries," CSLS Research Reports 2005-03, Centre for the Study of Living Standards.
    18. Centre for the Study of Living Standards, 2001. "Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress," CSLS Research Reports 01cp, Centre for the Study of Living Standards.
    19. Cassandro Mendes & Yannis Arvanitis, 2021. "Working Paper 360 - Total factor productivity and growth strategy in Cabo-Verde," Working Paper Series 2486, African Development Bank.

    More about this item

    Keywords

    Total Factor Productivity; Technology; Growth; Measurement; Economic Concept; Innovation; GPT; Natural Resources; Neoclassical Growth Model; Technological Change; Definitions;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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