The Kaldor-Verdoorn Law conjectures that the causality is mainly from GDP to productivity. It’s not obvious to most economists. They do observe that GDP rises fast when productivity is rising fast but don’t see the direction of causality and assume it’s from the latter to the former....The Case for Concerted Action
The Kaldor-Verdoorn Law In Action
V. Ramanan
Clearly there is a correlation between optimizing demand and the increased competition that stems from that demand. Under-performing output is a productivity drag!
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ReplyDeleteYou could use 1 minus the deficit divided by leading flow within a fiscal interval to determine economic efficiency within that interval...
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