Aggregate productivity and aggregate technology are meaningful but distinct concepts. We show that a slightly modified … Solow productivity residual measures changes in economic welfare, even when productivity and technology differ because of …-technological gaps between productivity and technology, gaps reflecting imperfections and frictions in output and factor markets …

Economic analysts have used trends in total factor productivity (TFP) to evaluate the effectiveness with which … economies are utilizing advances in technology. However, this measure is problematic on several different dimensions. First, the … idea that it is possible to separate out the relative contribution to economic output of labor, capital, and technology …