Using the capital shares from applying Sarel’s method, the study of Mallikamas and
others finds a strong rise in TFP growth throughout the 1980s (reaching 5.5-6 percent per year by
the end of the decade), and a gradual decline in the 1990s prior to the financial crisis (averaging
3.3 percent in 1991-96). They attribute the decline to excess investment in the years leading up
to the financial crisis. They report a recovery to a rate near 2 percent in 2001. The high TFP
growth compared to the other studies is the result of the relatively low weight assigned to capital
and the exclusion of any adjustment for improvements in labor quality.