Role of total factor productivity in economic growth in taiwan

Koki Kyo, Hideo Noda

Research output: Contribution to journalArticle

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Abstract

This paper applies Bayesian modeling techniques to analyze trends in total factor productivity (TFP) behind Taiwan's economic growth. To estimate time-varying TFP and elasticities of output with respect to factors of production, smoothness priors are incorporated into statistical models based on a Cobb-Douglas production function. We assume that in some situations there may be rapid changes in TFP, although TFP in general varies smoothly. Our modeling enables the expression of diverse patterns of TFP and an understanding of the continuous movement of TFP. Thus, a more flexible model can be constructed compared with the conventional models in empirical studies of TFP. The results suggest that TFP will play an increasingly important role in Taiwan's future economic growth.

Original languageEnglish
Pages (from-to)929-936
Number of pages8
JournalICIC Express Letters, Part B: Applications
Volume4
Issue number4
Publication statusPublished - 4 Sep 2013

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Keywords

  • Bayesian modeling
  • Economic growth
  • Smoothness priors
  • Taiwan
  • Total factor productivity

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