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I am trying to derive the growth rate and total factor productivity for the last five years in Kenya. I am trying to understand what formula to use and calculate this.
8 years ago

Economics Question asked by Lorraine

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For growth rate, you can use Real GDP Growth of the country, or Real GDP Growth per head. For total factor productivity, you`ll have to find the portion of output generated by the amount of inputs used in production. It is usually made up of capital and labour, e.g TFP = 4Q+3L.
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Growth rate
Present value minus past value divided by past value multiplied by hundred.

Total factor productivity
Output divided by weighted average of inputs.
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The standard measure of total factor productivity growth
is the Solow residual. If you need an explanation of this there is a great resource on the Bank of England website.
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