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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)

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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Bibliographic Info

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

Volume (Year): 38 (2007)
Issue (Month): 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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Keywords: macroeconomics; productivity growth; labor productivity;

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References

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Citations

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Cited by:
  1. Taylor, John B., 2008. "A review of the productivity resurgence," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 619-626.
  2. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
  3. Andrew Figura & William Wascher, 2008. "The causes and consequences of economic restructuring: evidence from the early 21st century," Finance and Economics Discussion Series 2008-41, Board of Governors of the Federal Reserve System (U.S.).
  4. Nicholas Crafts, 2010. "Cliometrics and technological change: a survey," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(5), pages 1127-1147.
  5. Hyunbae Chun & Jung-Wook Kim & Randall Morck, 2011. "Varying Heterogeneity among U.S. Firms: Facts and Implications," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 1034-1052, August.
  6. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the information technology revolution over?," Finance and Economics Discussion Series 2013-36, Board of Governors of the Federal Reserve System (U.S.).
  7. Huub Meijers, 2014. "Does the internet generate economic growth, international trade, or both?," International Economics and Economic Policy, Springer, vol. 11(1), pages 137-163, February.
  8. Choi, Changkyu & Hoon Yi, Myung, 2009. "The effect of the Internet on economic growth: Evidence from cross-country panel data," Economics Letters, Elsevier, vol. 105(1), pages 39-41, October.
  9. Nicholas Oulton, 2010. "Long Term Implications of the ICT Revolution: Applying the Lessons of Growth Theory and Growth Accounting," CEP Discussion Papers dp1027, Centre for Economic Performance, LSE.
  10. Crafts, Nicholas & O’Rourke, Kevin Hjortshøj, 2014. "Twentieth Century Growth*This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 263-346 Elsevier.
  11. Janet L. Yellen, 2007. "The U.S. economy and monetary policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue dec7.

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