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So, too, was the pace of improvement in "total factor productivity" (a measure of the overall efficiency with which capital and workers are used which is economists' best gauge of the speed of innovation).
It teased out the underlying growth of labour, capital and "total factor productivity" (TFP), a proxy for technology that captures the efficiency with which capital and labour are used.
To achieve its 8% growth target, India badly needs to increase that proportion and to improve the efficiency with which capital is used.Don't mention itThe government's ability to do this, however, is limited by the appalling state of its finances.
It must also be "accessible": this is harder to quantify but what matters is openness to foreign ownership, the ease with which capital can flow across borders and the stockmarket's functioning.
As I argued last fall in India Ink, based on the data we then had, India's trend rate of growth should be around 8.75 percent, based on the underlying fundamentals of savings and investment as well as the efficiency with which capital is used.
Third, and more controversially, the papers argue that crises undercut innovation, and the efficiency with which capital and labour are used, by interrupting the supply of capital to high-growth firms or by reducing spending on research and development.The upshot is a permanent reduction in the path of potential GDP.
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In this way, the space for decision-making by the democratically elected politicians is severely limited, and the political process deals predominantly with issues towards which capital is indifferent (like culture wars).
"As long as you have a model where simply accumulating capital is your main source of growth and the efficiency with which that capital is used is not important, then all of these processes can continue unimpeded and they don't really obstruct growth," he said.
Total-factor productivity, which gauges the efficiency with which both capital and labour are used, is lower now than it was in 1960.
REALITY is just beginning to sink in for Yemenis astounded by the speed with which their capital city, Sana'a, has fallen to an insurgent group known as the Houthis.
It's "based on current employment figures, not the period when Romney worked at Bain," and it "does not include job losses from other companies with which Bain Capital was involved".
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