where the dots over the variables indicate time derivatives, so that for any X, X? = dX/dt,
and X?/X is the rate of growth, while ? is the instrument for the regime variable. The
coefficients A?/A (treated as constants, either for regimes or for countries or for years,
depending on estimation methods), a, and ß provide selection-unbiased estimates of,
respectively, technical progress and the efficiency with which capital stock and labor force contribute to growth under each regime. This is then a test of the hypothesis that the
efficiency with which resources are used is the same under the two regimes.