The importance of total factor productivity with three production factors

The search for high GDP and vigorous growth is often criticised, given the negative effects of growth on the environment and the climate, and the need to take into account inequalities and well-being and not only income. However, we believe total factor productivity with three production factors (capital, labour, energy) provides important information on the efficiency of the economy and on well-being: If capital is technological and modern, then capital productivity is high. This is not the case if capital is old and obsolete; If the population’s skills are strong and if jobs become more sophisticated, labour productivity is strong; If energy savings are made, energy productivity is high. All in all, being thrifty in the use of production factors to produce income increases well-being: there is more income to share, the climate targets are met, the level of sophistication of the economy improves, there are fewer low-skilled and therefore poorly paid jobs, etc. When we measure total factor productivity with three production factors in OECD countries, we see that unfortunately, it has continued to slow down, especially since the subprime crisis