Additive Growth / Thomas Philippon.

By:

Philippon, Thomas

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29950.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

Online resources:

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Abstract: Growth theory is based on the assumption of exponential total factor productivity (TFP) growth. Across countries and time periods I find that TFP growth is actually linear. Unlike the exponential model, the additive growth model provides useful medium-term forecasts of TFP. It also explains the TFP slowdown and the volatility puzzle, and predicts falling real interest rates. For the distant future the model predicts ever increasing increments in standards of living but with growth rates that converge to zero. For the distant past the model suggests that the size of TFP increments has changed in the late 1600's, the early 1800's, and around 1930.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w29950 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w29948 The Economics of Fertility: A New Era /	nber w29949 Cohort Effects on Expected Co-Movement /	nber w2995 Tying, Foreclosure, and Exclusion /	nber w29950 Additive Growth /	nber w29951 A Comparative Perspective on Long-Term Care Systems /	nber w29952 Air Pollution and the Labor Market: Evidence from Wildfire Smoke /	nber w29953 Partially Linear Models under Data Combination /	Next

April 2022.

Growth theory is based on the assumption of exponential total factor productivity (TFP) growth. Across countries and time periods I find that TFP growth is actually linear. Unlike the exponential model, the additive growth model provides useful medium-term forecasts of TFP. It also explains the TFP slowdown and the volatility puzzle, and predicts falling real interest rates. For the distant future the model predicts ever increasing increments in standards of living but with growth rates that converge to zero. For the distant past the model suggests that the size of TFP increments has changed in the late 1600's, the early 1800's, and around 1930.