Approaches to Assessing the Factors of Production and Technological Development of the National Economies: Review of International Practice
The article provides an overview of methods for measuring the technological progress developed in the last 50–60 years, and analyzing the performance of national economies. A special place is given to production functions as a tool that allows one to give aggregated estimates of technological progress in the framework of different ways, including frontier analysis, i.e., (the analysis of stochastic efficiency frontier requires the SFA approach and the envelope method requires the DEA approach) and nonedge analysis (Solow residual). We have analyzed the feasibility of expanding the traditional threefactor model of production functions, including labor, physical, and human capital through the addition of two indicators, i.e., institutional development and provision of infrastructure. A review of variables available in global statistical databases and ability to approximate these production factors has been presented.