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U.S. competitiveness seen lagging in the long term.

The amount of labor, capital and total factor productivity (TFP) contributing to gross domestic product (GDP) growth for the United States and its major trading partners in the 1980s is illustrated below.

TFP measures the combined effect of new technology, changes in economies of scale, managerial skill, organizational changes in production, changes in the composition of the labor force and other factors.

Job growth accounted for nearly one-half of U.S. GDP growth during the period, while additions to capital and increases in TFP contributed significantly more to competitors' growth. The disparity suggests the United States is investing less in its productive base to gain a short-term price advantage in world markets.
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Publication:Journal of Accountancy
Article Type:Illustration
Date:Sep 1, 1993
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