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How much of this is productivity and how much is merely increased revenue? If you assume that costs are not linear with large economies of scale (which is not s
by tankenmate 11y ago
How much of this is productivity and how much is merely increased revenue? If you assume that costs are not linear with large economies of scale (which is not such a wild assumption), then some of this "productivity" increase can be attributed to rent taking; especially so when taking into account the power law distribution at the thick end of markets and reduction of competitiveness at the big end.
- justincormack 11y agoYes, most measures of productivity correspond to profitability, as there are few other measures, so this is a big issue, especially in service industries (eg finance, where productivity has fallen since the crash as measured, but how work is done has not changed, just because volumes of sales have fallen). It is clear that some firms are drastically less efficient than others though.
- stevetrewick 11y agoThey use a measure called Multifactor Productivity. From the linked report : Multi-factor productivity (MFP) growth measures the growth of GDP over the combined contributions of total hours, workforce skills, machinery and structures and ICT capital. From wikipedia [0] : Multifactor productivity measures reflect output per unit of some combined set of inputs. A change in multifactor productivity reflects the change in output that cannot be accounted for by the change in combined inputs. As a result, multifactor productivity measures reflect the joint effects of many factors including new technologies, economies of scale, managerial skill, and changes in the organization of production. [0] https://en.wikipedia.org/wiki/Multifactor_productivity https://en.wikipedia.org/wiki/Multifactor_productivity