Therefore an increase in the rate of growth of either R&D capital or human capital leads to a rise in the rate of growth of TFP. An alternative view might be that these variables should enter as levels effects, so that a rise in the level of R&D capital or human capital would lead to a rise in the rate of growth of measured TFP. Such a rise in the growth rate is in the spirit of the Benhabib & Spiegel (1994) view of human capital. We test whether the levels or differences effect is the most significant.