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Labour Productivity Growth Slowdown: An Effect of Economic Stagnation Rather than its Cause?

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  • Leon Podkaminer

    (Vienna Institute for International Economic Studies, Austria)

Abstract

This paper reports the results of an econometric examination on the links between labour productivity and output growth for 22 countries (for which long-term data are available). It turns out that, generally, labour productivity does not “cause” output. In more cases, the causation seems to be running in the opposite direction: from output to productivity. This finding, though inconsistent with the “mainstream” ideas on the sources of long-term economic growth, is reminiscent of the classical Kaldor-Verdoorn Law. The progressing slowdown in output growth on the global level, initiated around the mid-1970s (when the process of discarding the earlier economic policy paradigms set in), may have been mirrored by the progressing slowdown in productivity growth (and that despite the hardly disputable acceleration of technological progress).

Suggested Citation

  • Leon Podkaminer, 2017. "Labour Productivity Growth Slowdown: An Effect of Economic Stagnation Rather than its Cause?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 67(supplemen), pages 67-77, August.
    • Handle: RePEc:aka:aoecon:v:67:y:2017:i:supplement1:p:67-77
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    Citations

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    Cited by:

    1. Hubert Gabrisch, 2020. "The productivity puzzle and the Kaldor-Verdoorn law: the case of Central and Eastern Europe," NBP Working Papers 318, Narodowy Bank Polski.
    2. Vítor João Pereira Domingues Martinho, 2019. "Socioeconomic Impacts of Forest Fires upon Portugal: An Analysis for the Agricultural and Forestry Sectors," Sustainability, MDPI, vol. 11(2), pages 1-14, January.
    3. Philipp Heimberger & Leon Podkaminer & Sandor Richter, 2018. "Monthly Report No. 10/2018," wiiw Monthly Reports 2018-10, The Vienna Institute for International Economic Studies, wiiw.
    4. Leon Podkaminer, 2021. "Does trade support global output growth? Further evidence on the global trade – global output connection," Bank i Kredyt, Narodowy Bank Polski, vol. 52(1), pages 23-36.
    5. Leon Podkaminer, 2019. "The decline in investment shares is not caused by falling relative prices of capital: a note," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 369-380, May.
    6. Hubert Gabrisch, 2021. "The long-run properties of the Kaldor–Verdoorn law: a bounds test approach to a panel of Central and East European (CEE) countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 101-121, February.

    More about this item

    Keywords

    labour productivity; economic growth; Kaldor-Verdoorn Law; Granger causality;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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