Solow Residual

The Solow residual is a number describing empirical productivity growth in an economy from year to year and decade to decade. Robert Solow defined rising productivity as rising output with constant capital and labor input. It is a "residual" because it is the part of growth that cannot be explained through capital accumulation or the accumulation of other traditional factors, such as land or labor. The Solow Residual is procyclical and is sometimes called the rate of growth of total factor productivity.

Read more about Solow Residual:  History, As A Residual Term in The Solow Model, Regression Analysis and The Solow Residual, Why The Productivity Growth Is Attached To Labour, Critique of The Measurement in Rapidly Developing Economies

Famous quotes containing the word residual:

    The volatile truth of our words should continually betray the inadequacy of the residual statement. Their truth is instantly translated; its literal monument alone remains.
    Henry David Thoreau (1817–1862)