Appendix: Market Imperfections and Biases in TFP Measurement

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Abstract

Appendix to IPM-43-7 reviewing how markups and labour unionization create biases in TFP measurement (Solow residual vs. true technical change), and the implications for interpreting India’s pre- and post-reform TFP growth comparison, drawing on Dobbelaere (2005), Harrison (1994), and related literature.

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