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Regulation and Productivity Growth: Are We in a New Productivity Slowdown?

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  • John W. Dawson

    (Appalachian State University)

Abstract

This paper updates the empirical evidence on the role of federal regulation and taxes in the well-known productivity slowdown of the 1970s, based on revised and extended data on federal regulation and marginal tax rates through 2016 in the U.S. The analysis uses a time-series model derived from endogenous growth theory with regulation and taxes as policy variables. Co-movement among the policy variables and productivity growth—during both the slowdown and the subsequent recovery—suggests regulation may have played a role. Tax effects are small and statistically insignificant. The updated results also suggest a new productivity slowdown is underway, since the early-2000s, and that regulation may once again have something to do with it.

Suggested Citation

  • John W. Dawson, 2020. "Regulation and Productivity Growth: Are We in a New Productivity Slowdown?," Economics Bulletin, AccessEcon, vol. 40(1), pages 188-201.
    • Handle: RePEc:ebl:ecbull:eb-19-00812
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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I1-P18.pdf
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    References listed on IDEAS

    as
    1. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
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    Cited by:

    1. John W. Dawson, 2021. "The Role of Regulation and Taxes in US Capital and Labor Input Use," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Spring 20), pages 55-78.

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    More about this item

    Keywords

    Regulation; taxes; macroeconomic performance; productivity slowdown;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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