Total Factor Productivity

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August 31, 2024 4 min read Definitions

Real Business Cycle: A Theory of Economic Fluctuations

Economics Finance Business Cycle Economics Theory Total Factor Productivity Economic Fluctuations Exogenous Shocks

Real Business Cycle (RBC) theory explains the source of economic fluctuations through persistent random shocks to technology or total factor productivity, suggesting that cyclical fluctuations are efficient responses to these exogenous shocks without the need for government intervention.

August 31, 2024 4 min read Definitions

Total Factor Productivity (TFP): Comprehensive Definition

Economics Finance Total Factor Productivity TFP Growth Accounting Productivity Economic Efficiency

Total Factor Productivity (TFP) measures the efficiency of all inputs to a production process, playing a critical role in growth accounting analysis by considering both labor and capital inputs.