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Explaining a Productive Decade

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Author Info
Stephen D. Oliner (Board of Governors of the Federal Reserve Board)
Daniel E. Sichel (Board of Governors of the Federal Reserve Board)
Kevin J. Stiroh (Board of Governors of the Federal Reserve Board)

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Abstract

This paper analyzes the sources of recent U.S. productivity growth using both aggregate and industry-level data. The paper confirms the central role of information technology in the productivity revival during 1995-2000 and shows that it played a significant, although smaller, role after 2000. Productivity growth after 2000 appears to have been boosted by industry restructuring and cost cutting in response to profit pressures, an unlikely source of future strength. In addition, the incorporation of intangible capital into the growth accounting framework somewhat diminishes estimates of labor productivity's performance since 2000 and makes the gain during 1995-2000 look larger than in the official data. Finally, the paper examines the outlook for trend growth in labor productivity; the resulting estimate, which is subject to much uncertainty, is centered at 2 1/4 percent a year, faster than the lackluster pace that prevailed before 1995 but somewhat slower than the 1995-2000 average.

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Publisher Info
Article provided by Economic Studies Program, The Brookings Institution in its journal Brookings Papers on Economic Activity.

Volume (Year): 38 (2007)
Issue (Month): 2007-1 ()
Pages: 81-152
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Handle: RePEc:bin:bpeajo:v:38:y:2007:i:2007-1:p:81-152

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Related research
Keywords: macroeconomics; productivity growth; labor productivity;

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Cited by:
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  1. Janet L. Yellen, 2007. "The U.S. economy and monetary policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue Jul 13. [Downloadable!]
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