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Is there still a productivity paradox? two methods for a transatlantic comparison

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Author Info
Fabrice Gilles
Yannick L’Horty

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Abstract

Economic activity accelerated in the United States, in the second part of the cycle, after 1995, within an environment of decreasing inflation. France has followed a qualitatively similar path since 1997, also clearly suggesting the effects of a positive supply shock. The spread of new information and communication technologies (NICT) partly explains these singular events. On one hand, a calculation of contributions to output growth suggests that they would explain about half of the increase in activity in the United States and one-fifth in France. On the other hand, a trend/cycle decomposition reveals that the structural acceleration in output and productivity gains in the United States are very much restricted to industries producing NICT and there is a rather small break in productivity gains. In France, where differences between sectors are not so clear-cut, the diffusion of NICT has been accompanied by a slowdown in trends in productivity gains. In both cases, there is little room left for the effects of the diffusion of technical progress associated with NICT.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 14 (2005)
Issue (Month): 7 (October)
Pages: 533-551
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Handle: RePEc:taf:ecinnt:v:14:y:2005:i:7:p:533-551

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Related research
Keywords: New economy Growth Productivity paradox Trend/cycle decomposition

References listed on IDEAS
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  1. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May. [Downloadable!] (restricted)
  2. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Economics Department. [Downloadable!]
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This page was last updated on 2008-9-17.


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