Sectoral Productivity Slowdown / M. Ishaq Nadiri.

By:

Nadiri, M. Ishaq

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w0423.Publication details: Cambridge, Mass. National Bureau of Economic Research 1980.Description: 1 online resource: illustrations (black and white)Subject(s):

C - Mathematical and Quantitative Methods

Online resources:

Available additional physical forms:

Hardcopy version available to institutional subscribers

Abstract: In this paper an attempt is made to answer two questions:1) What set of factors explains the recent slowdown of the U.S. aggregate labor productivity, and 2) whether the same set of forces account for the slowdown of sectoral productivity growth as well. We specify a model which relates measured labor productivity growth to capital/labor ratio, level and rate of change of utilization, stock of R & D, and the rate of disembodied technical change. The model is estimated using sectoral and aggregate data for the period 1949-1978.The results of the estimation suggest that the pattern of aggregate productivity growth can be explained by the growth of capital/labor ratio the gap between potential and actual output growth paths, the change in degree of utilization, the growth of stock of total R & D, and the time trend. In fact, both at the aggregate and sectoral levels, these factors account fairly well, first for the growth and then for the subsequent slowdown of labor productivity in the postwar period. To be sure, in some specific industries, the performance of the model could be improved. However, the overall conclusion reached is that the slowdown in growth of capital formation, the inability of the economy and various sectors to grow at their normal growth rates, and the slowdown in rate of technological change are some of the main reasons for the observed productivity slowdown of the recent years.

Tags from this library: No tags from this library for this title. Log in to add tags.

Average rating: 0.0 (0 votes)

Holdings
Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w0423 (Browse shelf(Opens below))	Not For Loan

Total holds: 0

1980.

In this paper an attempt is made to answer two questions:1) What set of factors explains the recent slowdown of the U.S. aggregate labor productivity, and 2) whether the same set of forces account for the slowdown of sectoral productivity growth as well. We specify a model which relates measured labor productivity growth to capital/labor ratio, level and rate of change of utilization, stock of R & D, and the rate of disembodied technical change. The model is estimated using sectoral and aggregate data for the period 1949-1978.The results of the estimation suggest that the pattern of aggregate productivity growth can be explained by the growth of capital/labor ratio the gap between potential and actual output growth paths, the change in degree of utilization, the growth of stock of total R & D, and the time trend. In fact, both at the aggregate and sectoral levels, these factors account fairly well, first for the growth and then for the subsequent slowdown of labor productivity in the postwar period. To be sure, in some specific industries, the performance of the model could be improved. However, the overall conclusion reached is that the slowdown in growth of capital formation, the inability of the economy and various sectors to grow at their normal growth rates, and the slowdown in rate of technological change are some of the main reasons for the observed productivity slowdown of the recent years.