Totalfactorproductivitygrowth(TFPgrowth)measurestheefficiencywithwhichinputslikelaborandcapitalarecombinedtoproduceoutput.Unlikepartialproductivitymeasures(e.g.,laborproductivity),TFPcapturestechnologicalprogress,managerialimprovements,andotherintangiblefactorsthatboostoutputbeyondinputincreases.Itiscalculatedastheresidualgrowthinoutputnotexplainedbygrowthinmeasurableinputs,oftenusingmethodsliketheSolowresidual.TFPgrowthisakeydriveroflong-termeconomicexpansion,innovation,andcompetitiveness,reflectinganeconomy'sabilitytoachievemorewiththesameresources.PolicymakersandanalyststrackTFPtoassesssustainablegrowthpotentialbeyondmerefactoraccumulation.
