Some Approaches to the Theory and Measurement of Total Factor Productivity: A Survey.

The emphasis of the paper is on the determinants of total factor productivity in the U.S. economy (with only a limited discussion of the productivity changes in the various industries). No attempt is made to discuss explicitly the research related to short-run factor productivity (short-run employment functions) and international comparisons of factor productivity. 1 Interested readers are referred to the important works on technological change and factor productivity: M. Brown [15, 1956], J. Kendrick [78, 1961], L. Lave [86, 1966], and the NBER volume The theory and empirical analysis of production functions edited by M. Brown [16, 1967]. The plan of the paper is as follows. Section I comprises a preliminary review of the indices of productivity, some empirical evidence, and a brief discussion of the forces which may govern the behavior of productivity changes. Two major topics are covered briefly in Section II: (i) the problems of aggregation underlying the aggregate production function, and (ii) some theoretical issues on the nature of technical change and problems of its diffusion. These topics are discussed both to indicate the types of dynamic factors involved in shaping the course of productivity movements, and also to consider the forces which are generally abstracted from in the discussions of total factor productivity and the aggregate production function. [ABSTRACT FROM AUTHOR]