The Productivity and Growth Assessment Framework (PGAF) is an analytical tool that provides a comprehensive assessment of the contributions of Total Factor Productivity (TFP) and the other production factors, capital and labor, to economic growth across 183 countries from 1990 to 2023. Moreover, PGAF introduces an insightful and informative description of the countries’ economic characteristics using various macroeconomic indicators. The main objective of the PGAF is to assess the macroeconomic situation of Arab countries relative to other countries worldwide and to design the necessary economic reform policies. In the PGAF, TFP is estimated using a Cobb-Douglas function as residual, to represent the part of the growth that is not explained by the changes in capital and labor, then the initial TFP estimates are revised using a Kalman filtering approach to capture the structural dynamics. The note discusses the PGAF tool’s estimation methodology and the related assumptions, data sources, and processing approach, results of sensitivity tests, and robustness check.
