This paper investigates the total factor productivity(TFP) gain of whole economy due to the removement of product, capital and labor market distortions in order to emphasize the importance of resource allocation efficiency improvement for the sustaini...
This paper investigates the total factor productivity(TFP) gain of whole economy due to the removement of product, capital and labor market distortions in order to emphasize the importance of resource allocation efficiency improvement for the sustaining growth of Korean economy. According to value-added model using annual series of 1998-2021, the TFP gain, though showing downward trend since 1998, amounts to 22.4% in 2021. Also, based on the gross-output model using year 2019 input-output table, the TFP gain showed 23.0%. Meanwhile, the contribution of manufacturing to the TFP gain of whole economy is larger than that of service sectors and, in view of the magnitude of TFP gain, the effect of removing each market distortion seems to be large in the order of capial, labor and product market distortions.