Productivity

Productivity is the ratio of output (product / service) over input (labor, material, etc..

Productivity = Output / Input

Productivity can be measured for an operation, department, organization or the whole country.

Productitity growth rate for a country is calculated from the following formula:

Productivity Growth = (Current Period Productivity - Previous Period Productivity) / (Previous Period Productivity) * 100

Productivity growth is an important factor that determine inflation. If productivity growth remains but wages and prices increased, inflation will increase.