The main purpose of this study is to analyze thechange in total factor productivity (TFP) in the Japaneseand American economies during the period 1963-70. TFP is anindex representing the productivity of all the inputs(capital, labor, and intermediate inputs) in a productionprocess. Partial productivity, on the other hand, measuresthe productivity of a single input, such as labor. Thegrowth rate of TFP is defined as the difference between thegrowth rate of real output and the weighted average of thegrowth rates of real inputs. In other words, a TFP changeshows how inputs are saved in a production process.The organization of the study will be as follows:Chapter II will investigate the theoretical foundations ofthe TFP measurement. Chapter III will examine how thefoundations can be applied to empirical studies. Chapter IVwill present empirical results and discuss their economicimplications. Conclusions will be presented in Chapter V.Statistical Appendix A describes industries investigated inChapter IV. Explanations of data sources and dataprocessing procedures will be described in StatisticalAppendix B.

"A Ph.D . Dissertation, Department of Economics, University of Michigan, March 1985"