--- canonical_url: "https://csls.ca/ipm-archive/issue-1/what-does-total-factor-productivity-measure/" title: "What Does Total Factor Productivity Measure?" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-10T09:12:40+00:00" date_modified: "2026-07-13T06:38:06+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2000" ipm_keyword: - "externalities" - "general purpose technologies" - "growth theory" - "measurement" - "natural resources" - "productivity paradox" - "technological change" - "TFP" ipm_research_theme: - "Measurement and methodology" ipm_country_focus: - "International" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # What Does Total Factor Productivity Measure? Canonical URL: https://csls.ca/ipm-archive/issue-1/what-does-total-factor-productivity-measure/ # What Does Total Factor Productivity Measure? [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-1-6-Lipsey-Carlaw.pdf) Cite this article × Cite this article as: Lipsey, Richard, and Kenneth Carlaw. 2000. “What Does Total Factor Productivity Measure?” International Productivity Monitor, No. 1 (Fall 2000): 31–40. https://www.csls.ca/ipm-archive/issue-1/what-does-total-factor-productivity-measure/ ## Authors: - Richard Lipsey Department of Economics, Simon Fraser University - Kenneth Carlaw Department of Economics, University of Canterbury ## IPM Issue 1 Fall 2000 pp. 31–40 ## Related IPM articles [Is the SNA Still Useful? 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The authors use the concept of general purpose technologies (GPTs) and the role of natural resources to show that major technological changes need not register in TFP measures, and that low TFP numbers do not indicate low technological dynamism. They conclude that the degree of confusion surrounding TFP justifies dropping it from discussions of long-term economic growth, or at minimum attaching a caveat that changes in TFP do not measure technological change. Cet article examine de façon critique ce que mesure et ne mesure pas la productivité multifactorielle (PMF), soutenant que la PMF ne peut pas simultanément saisir tous les changements technologiques et les seuls effets externes et d’échelle. Les auteurs utilisent le concept de technologies à usage général et le rôle des ressources naturelles pour montrer que des changements technologiques majeurs ne se reflètent pas nécessairement dans les mesures de PMF, et que de faibles chiffres de PMF n’indiquent pas un faible dynamisme technologique. Ils concluent que le degré de confusion entourant la PMF justifie de l’écarter des discussions sur la croissance économique à long terme, ou à tout le moins d’y joindre la mise en garde que les variations de PMF ne mesurent pas le changement technologique. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-1-6-Lipsey-Carlaw.pdf)