Building a New Testable Model to Estimate Total Factor Productivity

Andrew Smithers

World Economics, 2017, vol. 18, issue 2, 51-82

Abstract: A new model to measure Total Factor Productivity free from the flaws which exist in previous models; appropriate data are used to test it. The model distinguishes between the contributions made to investment and growth by changes in technology and other non-technology variables. A key constituent of non-technology variables is the equity hurdle rate; since 2000 this has dramatically changed and thereby stifled investment and productivity. Reform of current management bonus arrangements is found to be essential to obviate the risk of economic stagnation.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:wej:wldecn:667

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