Secret to Productivity Found at Busy Auto Plant: Syverson, Levitt & List
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Aug. 19 (Bloomberg) -- Where do productivity gains comefrom? Economists have known for decades that the broadestmeasure of efficiency -- known as total factor productivity --drives long-term income growth and prosperity. Progress occursas firms figure out how to boost output without having to hiremore workers or install more capital.
If total factor productivity sounds like something of ablack box -- a quasi-magical ingredient that creates output outof seemingly nothing -- well, it sort of is. Sure, economistshave some ideas about its sources: adoption of new technologies,better management practices, and improvements in productionchains. But a more detailed understanding is emerging.