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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:
![(delta uppercase t over uppercase t equals to (delta uppercase q over uppercase q minus [ (lowercase alpha times delta labor over labor) plus (lowercase beta times delta capital over capital) plus (lowercase gamma times delta intermediate inputs over intermediate inputs) ]](https://webarchive.library.unt.edu/eot2008/20090510132825im_/https://www.bts.gov/programs/economics_and_finance/a_primer_on_multifactor_productivity/images/appendix_a_eq_01.gif)
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.
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