∆lnq = ∆lnA + α ∆lnk (where ∆lnA = ∆lnTFP = ∆lnq – α ∆lnk) average annual growth rates 1963-73 1973-79 1980-90 1990-98 Dlnq DlnA Japan 8.6 6.1 3.2 1.8 2.7 1.6 0.7 UK 3.3 2.0 1.3 0.2 2.3 n.a. 1.5 1.2 USA 2.2 0.6 -0.1 1.1 0.8 1.4 Italy 6.5 4.7 2.4 0.5

∆lnA (∆lnTFP): average annual growth rates 1995-2007 1995-2001 2001-2007 Japan (2006) 0.18 -0.13 0.56 UK 0.42 0.25 0.58 USA 0.63 0.38 0.88 Italy -0.29 -0.11 -0.47 Germany 0.68 0.65 0.71

BRICs TFP

∆lnTFP: average annual growth rates 2001-2007 2000-2009 Japan (2006) 0.6 Brazil 0.4 UK Russia 4.8 USA 0.9 India 2.8 Italy -0.5 China 5.2 Germany 0.7