Detailed Studies

More thorough studies refine the simple calculation but show quite similar conclusions. Table 27-3 on page 584 presents the results of studies by the Department of Labor for. the 1948- 1997 period. Doling this time, output (measured as gross output of the private business sector) grew at an average rate of 3.5 percent per year, while input growth (of capital, labor, and land) contributed 2.2 percentage points per year. Hence total factor ‘productivity-the growth of output less the growth of the weighted sum of all inputs, or what we have called T.e-averaged 1.3 percent annually. Somewhat less than two-thirds of the growth in output in the United States can be accounted for by the growth in Lahore and capital. The remaining third is a residual factor that can be attributed .to education, research and development, innovation, economies of scale, advances in knowledge, and other factors.