About 1997 crisis

Total-factor productivity (TFP) addresses any effects in total output not caused by inputs or economies of scale. For example, a year with unusually good weather will tend to have higher output, because bad weather hinders agricultural output. A variable like weather does not directly relate to unit inputs, so weather is considered a total-factor productivity variable.

The equation below (in Cobb-Douglas form) represents total output (Y) as a function of total-factor productivity (A), capital input (K), labor input (L), and the two inputs' respective shares of output (α is the capital input share of contribution).

Technology Growth and Efficiency are regarded as two of the biggest sub-sections of Total Factor Productivity

Total Factor Productivity is often seen as the real driver of growth within an economy and studies reveal that whilst labour and investment are important contributors, Total Factor Productivity may account for up to 60% of growth within economies.