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To Measure or Not To Measure Total Factor Productivity Growth?

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  • Renuka Mahadevan

Abstract

To date, the concept, measurement and interpretation of total factor productivity (TFP) growth remains highly discussed but poorly understood. This paper attempts to provide a review of these issues. First, the definition of TFP growth and the related concepts of embodied and disembodied technical change are discussed. Second, a brief overview and critique of TFP growth measuring techniques is provided. Third, the debate surrounding the accounting identity underlying the estimation of a production function for TFP growth is highlighted. Fourth, the usefulness of TFP growth is evaluated (and maintained) in the light of the criticisms hurled at this measure. Finally, some direction for future work on TFP growth is suggested.

Suggested Citation

  • Renuka Mahadevan, 2003. "To Measure or Not To Measure Total Factor Productivity Growth?," Oxford Development Studies, Taylor & Francis Journals, vol. 31(3), pages 365-378.
    • Handle: RePEc:taf:oxdevs:v:31:y:2003:i:3:p:365-378
    DOI: 10.1080/1360081032000111742
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    References listed on IDEAS

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    1. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," NBER Working Papers 5067, National Bureau of Economic Research, Inc.
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