Revisiting U. S. Productivity Growth over the Past Century with a View of the Future
AbstractThis paper provides three perspectives on long-run growth rates of labor productivity (LP) and of multi-factor productivity (MFP) for the U. S. economy. It extracts statistical growth trends for labor productivity from quarterly data for the total economy going back to 1952, provides new estimates of MFP growth extending back to 1891, and tackles the problem of forecasting LP and MFP twenty years into the future. The statistical trend for growth in total economy LP ranged from 2.75 percent in early 1962 down to 1.25 percent in late 1979 and recovered to 2.45 percent in 2002. Our results on productivity trends identify a problem in the interpretation of the 2008-09 recession and conclude that at present statistical trends cannot be extended past 2007. For the longer stretch of history back to 1891, the paper provides numerous corrections to the growth of labor quality and to capital quantity and quality, leading to significant rearrangements of the growth pattern of MFP, generally lowering the unadjusted MFP growth rates during 1928-50 and raising them after 1950. Nevertheless, by far the most rapid MFP growth in U. S. history occurred in 1928-50, a phenomenon that I have previously dubbed the “one big wave.” The paper approaches the task of forecasting 20 years into the future by extracting relevant precedents from the growth in labor productivity and in MFP over the last seven years, the last 20 years, and the last 116 years. Its conclusion is that over the next 20 years (2007-2027) growth in real potential GDP will be 2.4 percent (the same as in 2000-07), growth in total economy labor productivity will be 1.7 percent, and growth in the more familiar concept of NFPB sector labor productivity will be 2.05 percent. The implied forecast 1.50 percent growth rate of per-capita real GDP falls far short of the historical achievement of 2.17 percent between 1929 and 2007 and represents the slowest growth of the measured American standard of living over any two-decade interval recorded since the inauguration of George Washington.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15834.
Date of creation: Mar 2010
Date of revision:
Publication status: published as IControversies about Work, Leisure, and Welfare in Europe and the United States In E. S. Phelps and H.-W. Sinn, Perspectives on the Performance of the Continental Economies, MIT Press, pp. 343-86.
Note: EFG PR
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
- N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
- N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Christine Carmody, 2013. "Slowing Productivity Growth - A developed economy," Economic Roundup, Treasury, Australian Government, issue 2, pages 57-78, December.
- 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.
- 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.).
- Stephen D. Oliner & Daniel E. Sichel & David M. Byrne, 2013. "Is the information technology revolution over?," Working Papers 37301, American Enterprise Institute.
- John Fernald, 2014.
"Productivity and Potential Output Before, During, and After the Great Recession,"
NBER Working Papers
20248, National Bureau of Economic Research, Inc.
- John Fernald, 2014. "Productivity and Potential Output Before, During, and After the Great Recession," NBER Chapters, in: NBER Macroeconomics Annual 2014, Volume 29 National Bureau of Economic Research, Inc.
- John Fernald, 2012. "Productivity and potential output before, during, and after the Great Recession," Working Paper Series 2012-18, Federal Reserve Bank of San Francisco.
- Fernald, John G., 2014. "Productivity and potential output before, during, and after the Great Recession," Working Paper Series 2014-15, Federal Reserve Bank of San Francisco.
If references are entirely missing, you can add them using this form.