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“Intangibles, investment, and efficiency”,

Third, a comparison of MFP growth rates reveals that this source of growth declines both in absolute and relative importance when intangibles are included as investment. This is most pronounced for the second period, during which the average annual growth rate of MFP drops from 1.42 percentage points under the “old” view to 1.08 percentage points when intangible investments are included in the analysis. Expressed as a fraction of the rate of growth in output per hour, MFP declines in importance from 51 percent to 35 percent. This result is not particularly surprising in light of Jorgenson and Griliches (1967) and in view of the fact that MFP is measured as a residual. Fourth, one thing that cannot be claimed for the “new” view is that intangibles affected the size of the mid-1990s pickup in labor productivity itself. The third column in both panels shows the percentage-point acceleration in each SOG factor between the two periods. It is apparent that the size of the acceleration in labor productivity in percentage points was virtually the same in both panels.