Measuring Total Factor Productivity in General Technical Progress Framework

Lei Qinli

doi:doi:10.11648/j.ajtas.20241306.11

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Measuring Total Factor Productivity in General Technical Progress Framework

Lei Qinli^*

Published in American Journal of Theoretical and Applied Statistics (Volume 13, Issue 6)

Received: 7 October 2024 Accepted: 25 October 2024 Published: 12 November 2024

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Abstract

The classical Solow's total factor productivity accounting assumes that technical progress is Hicks neutral, which is a special situation in the reality of world economy. This paper expands the setting of technical progress into general technical progress framework, which can cover Hicks neutral technical progress, Harrod neutral technical progress, Solow-neutral technical progress, and various factor-biased technical changes. According to the principle of statistical index number, this paper decomposes the output index into a total factor input index and a total factor productivity index, and adopts normalized CES production function with factor-augmenting technical progress to derive the calculation formulas of the total factor input index and the total factor productivity index, and constructs a new economic growth accounting system, and finds the counteraction and compensation mechanism for diminishing marginal returns. If the factor substitution elasticity is 1 or there is no technical progress bias and factor allocation bias, then the new accounting equation degenerates into the classic Solow growth accounting equation. The new accounting system can measure the influence of total factor input and total factor productivity to economic growth, but also can measure the influences of factor input intensity and factor allocation bias in the growth rate of total factor input, and the influences of technical progress intensity and technical progress bias in the growth rate of total factor productivity. Therefore it is more precise and accurate than classical method.

Published in	American Journal of Theoretical and Applied Statistics (Volume 13, Issue 6)
DOI	10.11648/j.ajtas.20241306.11
Page(s)	181-192
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

General Technical Progress, Economic Growth, Total Factor Input Index, Total Factor Productivity Index

References

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[14]	Lei Qinli and Xu Jiachun. Biased Technological Progress, Biased Factor Allocation, and TFP Growth in China [J]. Statistical Research, 2015, 32(8): 10-16. https://doi.org/10.19343/jcnki.11-1302/c.2015.08.002
[15]	Lei Qinli and Li Yuelin. Capital-Skill Complementarity and the Direction of skill Bias of Technological Progress [J]. Statistical Research, 2020, 37(3): 48-59. https://doi.org/10.19343/jcnki.11-1302 /e.2020.03.004
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APA Style

Qinli, L. (2024). Measuring Total Factor Productivity in General Technical Progress Framework. American Journal of Theoretical and Applied Statistics, 13(6), 181-192. https://doi.org/10.11648/j.ajtas.20241306.11

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ACS Style

Qinli, L. Measuring Total Factor Productivity in General Technical Progress Framework. Am. J. Theor. Appl. Stat. 2024, 13(6), 181-192. doi: 10.11648/j.ajtas.20241306.11

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AMA Style

Qinli L. Measuring Total Factor Productivity in General Technical Progress Framework. Am J Theor Appl Stat. 2024;13(6):181-192. doi: 10.11648/j.ajtas.20241306.11

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@article{10.11648/j.ajtas.20241306.11,
  author = {Lei Qinli},
  title = {Measuring Total Factor Productivity in General Technical Progress Framework
},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {13},
  number = {6},
  pages = {181-192},
  doi = {10.11648/j.ajtas.20241306.11},
  url = {https://doi.org/10.11648/j.ajtas.20241306.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20241306.11},
  abstract = {The classical Solow's total factor productivity accounting assumes that technical progress is Hicks neutral, which is a special situation in the reality of world economy. This paper expands the setting of technical progress into general technical progress framework, which can cover Hicks neutral technical progress, Harrod neutral technical progress, Solow-neutral technical progress, and various factor-biased technical changes. According to the principle of statistical index number, this paper decomposes the output index into a total factor input index and a total factor productivity index, and adopts normalized CES production function with factor-augmenting technical progress to derive the calculation formulas of the total factor input index and the total factor productivity index, and constructs a new economic growth accounting system, and finds the counteraction and compensation mechanism for diminishing marginal returns. If the factor substitution elasticity is 1 or there is no technical progress bias and factor allocation bias, then the new accounting equation degenerates into the classic Solow growth accounting equation. The new accounting system can measure the influence of total factor input and total factor productivity to economic growth, but also can measure the influences of factor input intensity and factor allocation bias in the growth rate of total factor input, and the influences of technical progress intensity and technical progress bias in the growth rate of total factor productivity. Therefore it is more precise and accurate than classical method.
},
 year = {2024}
}

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TY  - JOUR
T1  - Measuring Total Factor Productivity in General Technical Progress Framework

AU  - Lei Qinli
Y1  - 2024/11/12
PY  - 2024
N1  - https://doi.org/10.11648/j.ajtas.20241306.11
DO  - 10.11648/j.ajtas.20241306.11
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 181
EP  - 192
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20241306.11
AB  - The classical Solow's total factor productivity accounting assumes that technical progress is Hicks neutral, which is a special situation in the reality of world economy. This paper expands the setting of technical progress into general technical progress framework, which can cover Hicks neutral technical progress, Harrod neutral technical progress, Solow-neutral technical progress, and various factor-biased technical changes. According to the principle of statistical index number, this paper decomposes the output index into a total factor input index and a total factor productivity index, and adopts normalized CES production function with factor-augmenting technical progress to derive the calculation formulas of the total factor input index and the total factor productivity index, and constructs a new economic growth accounting system, and finds the counteraction and compensation mechanism for diminishing marginal returns. If the factor substitution elasticity is 1 or there is no technical progress bias and factor allocation bias, then the new accounting equation degenerates into the classic Solow growth accounting equation. The new accounting system can measure the influence of total factor input and total factor productivity to economic growth, but also can measure the influences of factor input intensity and factor allocation bias in the growth rate of total factor input, and the influences of technical progress intensity and technical progress bias in the growth rate of total factor productivity. Therefore it is more precise and accurate than classical method.

VL  - 13
IS  - 6
ER  -

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Author Information

Lei Qinli

Department of Economic Statistics, Guangzhou Huashang College, Guangzhou, China

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APA Style

Qinli, L. (2024). Measuring Total Factor Productivity in General Technical Progress Framework. American Journal of Theoretical and Applied Statistics, 13(6), 181-192. https://doi.org/10.11648/j.ajtas.20241306.11

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ACS Style

Qinli, L. Measuring Total Factor Productivity in General Technical Progress Framework. Am. J. Theor. Appl. Stat. 2024, 13(6), 181-192. doi: 10.11648/j.ajtas.20241306.11

Copy | Download

AMA Style

Qinli L. Measuring Total Factor Productivity in General Technical Progress Framework. Am J Theor Appl Stat. 2024;13(6):181-192. doi: 10.11648/j.ajtas.20241306.11

Copy | Download

@article{10.11648/j.ajtas.20241306.11,
  author = {Lei Qinli},
  title = {Measuring Total Factor Productivity in General Technical Progress Framework
},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {13},
  number = {6},
  pages = {181-192},
  doi = {10.11648/j.ajtas.20241306.11},
  url = {https://doi.org/10.11648/j.ajtas.20241306.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20241306.11},
  abstract = {The classical Solow's total factor productivity accounting assumes that technical progress is Hicks neutral, which is a special situation in the reality of world economy. This paper expands the setting of technical progress into general technical progress framework, which can cover Hicks neutral technical progress, Harrod neutral technical progress, Solow-neutral technical progress, and various factor-biased technical changes. According to the principle of statistical index number, this paper decomposes the output index into a total factor input index and a total factor productivity index, and adopts normalized CES production function with factor-augmenting technical progress to derive the calculation formulas of the total factor input index and the total factor productivity index, and constructs a new economic growth accounting system, and finds the counteraction and compensation mechanism for diminishing marginal returns. If the factor substitution elasticity is 1 or there is no technical progress bias and factor allocation bias, then the new accounting equation degenerates into the classic Solow growth accounting equation. The new accounting system can measure the influence of total factor input and total factor productivity to economic growth, but also can measure the influences of factor input intensity and factor allocation bias in the growth rate of total factor input, and the influences of technical progress intensity and technical progress bias in the growth rate of total factor productivity. Therefore it is more precise and accurate than classical method.
},
 year = {2024}
}

Copy | Download

TY  - JOUR
T1  - Measuring Total Factor Productivity in General Technical Progress Framework

AU  - Lei Qinli
Y1  - 2024/11/12
PY  - 2024
N1  - https://doi.org/10.11648/j.ajtas.20241306.11
DO  - 10.11648/j.ajtas.20241306.11
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 181
EP  - 192
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20241306.11
AB  - The classical Solow's total factor productivity accounting assumes that technical progress is Hicks neutral, which is a special situation in the reality of world economy. This paper expands the setting of technical progress into general technical progress framework, which can cover Hicks neutral technical progress, Harrod neutral technical progress, Solow-neutral technical progress, and various factor-biased technical changes. According to the principle of statistical index number, this paper decomposes the output index into a total factor input index and a total factor productivity index, and adopts normalized CES production function with factor-augmenting technical progress to derive the calculation formulas of the total factor input index and the total factor productivity index, and constructs a new economic growth accounting system, and finds the counteraction and compensation mechanism for diminishing marginal returns. If the factor substitution elasticity is 1 or there is no technical progress bias and factor allocation bias, then the new accounting equation degenerates into the classic Solow growth accounting equation. The new accounting system can measure the influence of total factor input and total factor productivity to economic growth, but also can measure the influences of factor input intensity and factor allocation bias in the growth rate of total factor input, and the influences of technical progress intensity and technical progress bias in the growth rate of total factor productivity. Therefore it is more precise and accurate than classical method.

VL  - 13
IS  - 6
ER  -

Copy | Download