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Tracking productivity in real time

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Author Info
James A. Kahn
Robert W. Rich

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Abstract

Because volatile short-term movements in productivity growth obscure the underlying trend, shifts in this trend may go unrecognized for years - a lag that can lead to policy mistakes and hence economic instability. This study develops a model for tracking productivity that brings in additional variables to help reveal the trend. The model's success is evident in its ability to detect changes in trend productivity within a year or two of their occurrence. Currently, the model indicates that the underlying trend remains strong despite recent weak productivity data.

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Publisher Info
Article provided by Federal Reserve Bank of New York in its journal Current Issues in Economics and Finance.

Volume (Year): (2006)
Issue (Month): Nov ()
Pages:
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Handle: RePEc:fip:fednci:y:2006:i:nov:n:v.12no.8

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Related research
Keywords: Industrial productivity - Measurement Economic policy Econometric models

Cited by:
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  1. Stephen D. Oliner & Daniel E. Sichel. & Kevin J. Stiroh, 2007. "Explaining a productive decade," Finance and Economics Discussion Series 2007-63, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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This page was last updated on 2008-10-9.


This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.