Growth Accounting
Definition
An analytical framework that decomposes economic or firm-level output growth into contributions from labour, capital, and a residual factor often interpreted as technological progress or total factor productivity. Growth accounting is fundamental to understanding how intangible investments — in R&D, software, organisational design, and human capital — drive productivity improvements.
Related Terms
Related FAQ
What is Gross Value Added (GVA)?
GVA measures the value a company creates by subtracting intermediate consumption (purchases of goods and services) from total revenue — it's the firm-level equivalent of GDP contribution.
Read full answer →The Solow Residual is the portion of output growth that cannot be explained by growth in labour and capital inputs — it represents Total Factor Productivity growth, which is largely driven by intangible assets.
Read full answer →What is Total Factor Productivity (TFP)?
TFP measures the portion of output growth that cannot be explained by increases in labour or capital inputs — it captures the efficiency gains from innovation, technology, and better management.
Read full answer →Put this knowledge to work
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