Productivity, efficiency, scale economies and technical change

"This paper aims to examine the productivity change of the Japanese economy using the datapertaining to the 47 prefectures during the period 1981-2000. The decomposition analysis of theHicks-Moorsteen-Bjurek productivity index is conducted to explore the sources of the productivitychange. In summary, technical change and efficiency change are two of the most importantcomponents driving procyclical productivity. We find that their relative importance varies overperiods. Supply shocks captured by technical change component caused upturns in productivity inthe mid and late 80s and in 1999 and 2000. Supply shocks also caused downturns in the early andmid 90s. On the other hand, demand shocks captured by the efficiency change component droveupturns of productivity in 1984, 1990, and 1996 when supply shocks were not detected"--National Bureau of Economic Research web site.