Appendix A. Basic Growth - Accounting Methodology

The empirical relationship used to estimate growth of multifactor productivity by the basic growth-accounting methodology is shown below:

Where:

= Growth of MFP

= Growth of gross output

= Growth of labor

= Growth of capital

= Growth of intermediate inputs

α = Share of labor cost in output

β = Share of capital cost in output

γ = Share of intermediate inputs cost in output.