Productivity

An economic measure that reflects the output for every unit of input. Due to technological improvements, better management methods and so on, productivity increases over the long term.

The most commonly quoted indicator of productivity is published by the Bureau of Labor Statistics every quarter. It is calculated by dividing the Gross Domestic Output (GDP) by the total amount of hours worked.

In “The Age of Turbulence”, Greenspan states that while technological revolutions have sped up productivity gains, since the Industrial Revolution, productivity gains at about 2% a year. Productivity gains are important as they lead to a more efficient economy and raise living standards in the long run.