Revisiting U. S. Productivity Growth over the Past Century with a View of the Future (original) (raw)

A Retrospective Look at the U.S. Productivity Growth Resurgence

Journal of Economic Perspectives, 2008

It is now widely recognized that information technology (IT) was the key to the dramatic acceleration of U.S. labor productivity growth in the mid-1990s. This paper traces the evolution of productivity estimates to document how and when this perception emerged. Early studies concluded that IT was relatively unimportant. It was only after the massive IT investment boom of the late 1990s that this investment and closely related productivity increases in the ITproducing sectors were identified as important sources of growth. Although IT has diminished in significance since the dot-com crash of 2000, we project that private sector productivity growth will average around 2.5 percent per year for the next decade, only moderately below the average of the post-1995 period.

Potential Growth of the US Economy: Will the Productivity Resurgence Continue

Business Economics, 2006

This paper analyzes the sources of U.S. productivity growth through 2004 and presents medium-term projections for the U.S. economy. We attribute a substantial portion of productivity gains over the past decade to production and use of information technology equipment and software. In the most recent years, we also identify a growing contribution from sources outside the technology- producing sectors. Our base-case projection for the GDP growth rate is almost exactly three percent. We emphasize the substantial range of uncertainty by presenting an optimistic projection of 3.5 percent and a pessimistic projection of only 1.9 percent.

Exploding Productivity Growth: Context, Causes, and Implications

Brookings Papers on Economic Activity, 2003

Will potential output grow in the future at a 4 percent annual rate, as several of the more optimistic business economists assume, or at the pathetic 1.8 percent annual rate assumed into the distant future by the trustees of the Social Security Administration? 1 Put differently, will real GDP in seventy-five years be 20 times its current level or a mere 3 1 ⁄ 2 times? Academic research on future supply-side issues has focused mainly on the causes of the post-1995 productivity growth revival, but the growth rate of potential output is of independent interest. Variations in four factors-population growth, labor force participation, the unemployment rate, and hours worked per employee-can create significant differences between the long-run path of potential output and that of trend productivity growth. These differences matter for numerous issues,

Projecting Productivity Growth: Lessons from the US Growth Resurgence

The New Economy and Beyond, 2006

This paper analyzes the sources of U.S. labor productivity growth in the post-1995 period and presents projections for both output and labor productivity growth for the next decade. Despite the recent downward revisions to U.S. GDP and software investment, we show that information technology (IT) played a substantial role in the U.S. productivity revival. We then outline a methodology for projecting trend output and productivity growth. Our base-case projection puts the rate of trend productivity growth at 2.21% per year over the next decade with a range of 1.33-2.92%, reflecting fundamental uncertainties about the rate of technological progress in IT-production and investment patterns. Our central projection is only slightly below the average growth rate of 2.36% during the 1995-2000 period.

Productivity and Performance of U.S. Economic Growth: 1948-2015

International Journal of Economics & Management Sciences, 2018

This paper raises basic questions about the performance of economic growth. The paper is only about the United States and views the future from 2015-2015 while pretending that the financial crisis did not happen. The sample period for investigation in 1945-2015 the empirical analysis of this study employed annual secondary data, collected from different sources, which are time series data. Growth gradually accelerated after 1750, reached a peak in the middle of the 20th century, and has been slowing down since. Three influential factors of growth are less the labor force, technology, and capital. Growth of technology is the most influential and thus special attention should be given its advancement. A key idea to take away from this paper is that while a model that fit the current data well, it may weigh recent events to heavily, recessionary or exponential growth, the average between the most optimistic and pessimistic models may be the best bet. Technology makes up the greatest fraction of total production and changes in labor and capital would not affect the growth rate as much as technology can and it was projected that in 20 years, the GDP level could be anywhere from 19,138.8usingthepolynomialmodelto19,138.8 using the polynomial model to 19,138.8usingthepolynomialmodelto34,681.8 using the first order exponential model. The growth rate of GDP is at 2.07% as of 2015, but using the first order exponential model, it will slow down to 1.38% by 2035. Keywords: Economic growth; Technology; Polynomial model; Productivity; Exponential model; Linear model

Industry Origins of the American Productivity Resurgence

Economic Systems Research, 2007

This paper analyzes the industry origins of the American growth resurgence by examining output, input, and productivity growth of 85 component industries for the period 1960 to 2005. We use this detailed industry data to examine trends in particular industry groups such as those that produce information technology (IT) or use IT most intensively and to perform a ‘bottom-up’ comparison of alternative aggregation methodologies. The data show that while labor productivity growth was strong throughout the full period after 1995, there were important differences between 1995–2000 and 2000–2005. The period 1995–2000, for example, was marked by strong growth in labor input so aggregate output was robust, while labor input and output growth both declined substantially after 2000. IT remained an important source of both capital deepening and total factor productivity growth after 2000, but the contributions were not as large as during the technology boom of the late 1990s. We also show that the production possibility frontier, which recognizes differences in output prices across industries, remains the most appropriate methodology for aggregating industry data.

Will the U.S. Productivity Resurgence Continue?

SSRN Electronic Journal, 2000

S. productivity growth has accelerated in recent years, despite a series of negative economic shocks. An analysis of the sources of this growth over the 1995-2003 period suggests that the production and use of information technology account for a large share of the gains. The authors project that during the next decade, private sector productivity growth will continue at a rate of 2.6 percent per year, a significant increase from their 2002 projection of 2.2 percent growth.

Is Productivity Growth Too Strong For Our Own Good?

Business Economics, 2013

Productivity growth and improvement in a nation's standard of living are widely thought to go hand in hand. During the past 15 years, however, the gap between productivity growth and growth of living standards has widened, igniting a debate about whether a larger share of the benefits from productivity gains has gone to capital rather than labor. The first phase of our study characterizes U.S. productivity growth for the period 1948-2011. Our statistical analysis found that productivity growth did not follow one particular pattern over time, and we therefore doubt that it would follow one pattern (either a higher or lower growth rate) in the near future. Our analysis concludes that the "productivity resurgence" era of 1996:Q1 to 2011:Q4 is associated with lower growth rates of real per capita income, employment, and consumer confidence relative to productivity. That may validate the "savage costcutting" and "polarization" hypotheses. The stable and higher growth rates of corporate profits and the S&P 500 index indicate that capital and higher skilled workers may have gained benefits from productivity growth over time. A simultaneous rise in food stamp recipients and income share of the top 0.01 percent during the post-mid-1990s era suggest that the distribution of the stronger productivity growth gains is asymmetric.

Sectoral Productivity in the United States: Recent Developments and the Role of IT

German Economic Review, 2007

This paper introduces new estimates of recent productivity developments in the United States, using an appropriate theoretical framework for aggregating industry multi-factor productivity (MFP) to sectors and the total economy. Our work sheds light on the sources of the continued strong performance of US productivity since 2000.We find that the major sectoral players in the late 1990s pickup were not contributors to the more recent surge in productivity. Rather, striking gains in MFP in the finance and business service sector, a resurgence in MFP growth in the industrial sector, and an end to drops elsewhere more than account for the aggregate acceleration in productivity in recent years. Further, some evidence is found for a link between IT intensity and the recent productivity acceleration.