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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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    References listed on IDEAS

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    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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    Keywords

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    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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