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Explaining a productive decade

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  • Stephen D. Oliner
  • Daniel E. Sichel.
  • Kevin J. Stiroh

Abstract

This paper analyzes the sources of U.S. productivity growth in recent years using both aggregate and industry-level data. We confirm the central role for information technology (IT) in the productivity revival during 1995-2000 and show that IT played a significant, though 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 takes some of the luster off the performance of labor productivity since 2000 and makes the gain during 1995-2000 look larger than in the official data. Finally, we examine the outlook for trend growth in labor productivity; our estimate, though 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 1995-2006 average.

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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2007-63.

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Date of creation: 2007
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Handle: RePEc:fip:fedgfe:2007-63

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Keywords: Industrial productivity ; Information technology;

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References

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Citations

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Cited by:
  1. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the Information Technology Revolution Over?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 20-36, Spring.
  2. 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.
  3. 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.
  4. 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.
  5. 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.).
  6. Janet L. Yellen, 2007. "The U.S. economy and monetary policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jul13.
  7. Taylor, John B., 2008. "A review of the productivity resurgence," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 619-626.
  8. 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.
  9. 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.
  10. 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.
  11. 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.

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