There are always issues regarding the accuracy of data on the capital stock, hours worked, and even GDP. And when we combine all these variables to calculate MFP - the “residual” factor which affects output - the measurement errors in the component series can make analysis difficult.
Furthermore, we are more  8  BIS Review 6/2005  interested in the underlying trends in MFP, rather than short term changes. One way of deriving a trend series for MFP is to use trend series for capital, labour, and GDP in calculating MFP.