LAC countries for the period 1961-2000. The study builds on earlier work by Elias (1992) , De Gregorio (1992), Bosworth and Collins (1996) , and Easterly and Levine (2002) . 3 Overall, this literature points to two key results. First, TFP performance in LAC (either in terms of the contribution to GDP growth or in level terms compared to other regions/countries) was very weak from 1980 through 2000, with TFP being a particular drag to growth in the 1980s. Second, the contribution of TFP to overall growth tends to be procyclical and changes in output growth are
differential being explained by differences in TFP performance . On the positive side, the growth gap vis-à-vis Asia has narrowed for all regions in the last decade compared with the 1990s, on account of a reduction in differences in capital accumulation and—to a smaller extent–labor contributions ( Figure 4 ). However, large TFP growth differentials remain, accounting for most of the GDP growth gap in the period 2000–12, for LAC, MENA and the CCA. The labor contribution to growth has been historically smaller in Europe than in Asia, while declining unemployment rates in LAC