Total Factor Productivity
From Open Risk Manual
Definition
Total Factor Productivity (TFP) is a measure of productivity calculated by dividing economy-wide total production by the weighted average of capital inputs.
Typically, TFP is the portion of growth in output not explained by growth in traditionally measured inputs of human and produced capital but not natural capital used in production. TFP is also referred to as multi-factor productivity (MFP) or Solow residual [1].
Economic productivity is broadly defined as the level of output of an industry or of the economy as a whole per unit of input. The concept of total factor productivity (TFP), which is defined generally as the growth in Total Output that is not attributable to growth in inputs.[2]
