¶ … 2002 Economic Report of the President
Differences in Structural TFP
The President's Economic Report (the "Report") claims that "structural labor productivity growth and TFP ("Total Factor Productivity") growth remained strong through 2001. This growth argues that the New Economy remains alive and well." See the Report, at 60-61.
The structural TFP growth differed between the time periods of 1973-1995 and 1995-2001. ("TFP growth" is defined as "the increase in aggregate output over and above that due to increases in capital or labor inputs." Ibid.)
There are several reasons for this difference.
First, investments in information technologies added 0.60% to the increase in structural productivity growth after 1995.
Second, "the rate of growth of TFP in computer-producing industries" rose ("as evidenced by the rapid decline in computer prices.")
Finally, the change "captures the extent to which technological change and other business and workplace improvements...
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