The Neoclassical Approach for Measuring Total Factor Productivity: The Case of the Greek Economy

This chapter examines and measures the source of growth linked with disembodied technical progress, i.e., total factor productivity growth for the period 2010–2015 for the various sectors of the Greek economy, using data from input–output tables. This chapter also links technical diffusion with productivity growth using the measure of total factor productivity (TFP) which can be seen also as a measure of disembodied in the factors of production technical progress. It was found that most of the sectors, during the 2010–2015 period had experienced a negative TFP change; out of the 64 sectors, 16 present a positive TFP change and 48 negative. During the examined period, the effects of adjustment program for the public debt and the incurred recession have influenced both public and private R&D expenditure affecting TFP change. R&D expenditure has been found to be a determining factor for TFP change in the Greek economy.