Research on Total Factor Productivity through the Ghosh Model: The Paradox of Developing Countries?

Abstract

This study is an attempt to give an overview of the total factor productivity (TFP) through the Leontief - Ghosh system. In principle, the change in the technical factor of input matrix coefficient is due to a change in technology, but in some developing countries the total of intermediate input increase is not due to the influence of technological process changes but due to Other non-economic factors. The efficiency seen from the Leontief - Ghosh relationship is that the ratio of intermediate costs will be small and the rate of value added progressively to 1. In these cases the less efficient the economy lead to the aggregate factor productivity greater. Is that a paradox of developing countries? Do mathematical - economic models seem to make no sense in these cases?