For each possible pairing of these input and output variables, you can define a productivity - that is, you can measure the output variable in question, measure the input variable in question, and divide the two. This is clearly an interesting number, almost no matter what resources you use as input and output - including man-hours. Whether it is meaningful to attempt to optimise the productivity w.r.t. any given (input,output) pair is another question entirely. But this does not detract from the fact that productivity in terms of some output w.r.t. some input is an interesting number to know.
You can then put these productivities into Leontief matrices, and you could define an absolute productivity increase as one in which every element of the matrix increased (resp. decreased, for those in the rows that have some form of pollution as output). But that takes us rather far afield from the original topic under discussion.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Technology Growth and Efficiency are regarded as two of the biggest sub-sections of Total Factor Productivity, the former possessing "special" inherent features such as positive externalities [i.e. profit margin; see MFP] and non-rivalness [sic! s/b monopoly conditions] which enhance its position as a driver of economic growth.
I wonder, why? Could it beeeeeeeeeeee, diminishing marginal cost of labor (L), where HUMAN substitute MECHANICAL input, so accelerating rate of profit captured per unit ouput per hour? I think so. Typical Forrester sell-sheet circa 2001:
Benchmarking Technical Productivity Business process change contributes to prodctivity growth, but efficiency gains for US firms varied widely over the past decade. Execs should benchmark their recent performance --and turn to eBusiness for the next wave of productivity growth. [BWAH!] ... Process change. ...ERP systems, for example, have helped firms like Saab coordinate orders across business units ...Resource allocation. ...Technologies for better logistics administration ...By contrast, primary goods industries like steel have been slower to adopt these technologies...Knowledge sharing. As firms globalize, they are using techlogies like corporate portals to share critical information across the enterprise. CAD software and product-development databases, for example, helped contribute to electronics manufacturers' 10.6% average annual TFP growth...
Business process change contributes to prodctivity growth, but efficiency gains for US firms varied widely over the past decade. Execs should benchmark their recent performance --and turn to eBusiness for the next wave of productivity growth. [BWAH!] ...
Such peculiar strategy of capital formation has paid off both corporatists and entrepreneurs for centuries, explaining in part a historical tendency in political speeches to understate the ever expanding universe of fungible "labor" components (enjoying tax credit allowances).
TFP is also dependent on estimates of the other components [of LABOR]. A 2005 study[1] on human capital attempted to correct for weaknesses in estimations of the labour component of the equation, by refining estimates of the quality of labour.
"Quality-adjusted labor": An interesting topic covered by numerous economists at NBER and OECD. Consider Oliner and Sichel, Cummins and Volante.
See also Multifactor productivity which expresses more explicitly correspondence of terms of production to terms of price structure. Which is helpful to the curious, when the ol' S-D fails to predict dislocations of effective demand and producer output, in aggregate. Diversity is the key to economic and political evolution.
