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U.S. Productivity Growth: An Optimistic Perspective

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  • Martin Neil Baily

    ()

  • James Manyika
  • Shalabh Gupta

Abstract

Recent literature has expressed considerable pessimism about the prospects for both productivity and overall economic growth in the U.S. economy, based either on the idea that the pace of innovation has slowed or on concern that innovation today is hurting job growth. While recognizing the problems facing the economy, this paper offers a more optimistic view of both innovation and future growth, a potential return to the innovation and employment-led growth of the 1990s. Technological opportunities remain strong in advanced manufacturing and the energy revolution will spur new investment, not only in energy extraction, but also in the transportation sector and in energy-intensive manufacturing. Education, health care, infrastructure (construction) and government are large sectors of the economy that have lagged behind in productivity growth historically. This is not because of a lack of opportunities for innovation and change but because of a lack of incentives for change and institutional rigidity.

Suggested Citation

  • Martin Neil Baily & James Manyika & Shalabh Gupta, 2013. "U.S. Productivity Growth: An Optimistic Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 3-12, Spring.
  • Handle: RePEc:sls:ipmsls:v:25:y:2013:1
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    File URL: http://www.csls.ca/ipm/25/IPM-25-Baily-Manyika-Gupta.pdf
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    References listed on IDEAS

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    1. Jianmin Tang & Weimin Wang, 2004. "Sources of aggregate labour productivity growth in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 421-444, May.
    2. Whelan, Karl, 2002. "A Guide to U.S. Chain Aggregated NIPA Data," Review of Income and Wealth, International Association for Research in Income and Wealth, pages 217-233.
    3. William D. Nordhaus, 2000. "Alternative Methods for Measuring Productivity Growth," Cowles Foundation Discussion Papers 1282, Cowles Foundation for Research in Economics, Yale University.
    4. Diewert, Erwin, 2008. "On the Tang and Wang Decomposition of Labour Productivity Growth into Sectoral Effects," Economics working papers erwin_diewert-2008-6, Vancouver School of Economics, revised 16 Apr 2008.
    5. Baumol, William J. & Batey Blackman, Sue Anne & Wolff, Edward N., 1984. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," Working Papers 84-02, C.V. Starr Center for Applied Economics, New York University.
    6. Jesus C. Dumagan, 2013. "A Generalized Exactly Additive Decomposition of Aggregate Labor Productivity Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, pages 157-168.
    7. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, pages 806-817.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Bernanke: Economic Prospects for the Long Run
      by Mark Thoma in Economist's View on 2013-05-18 15:14:38
    2. Economic Prospects for the Long Run
      by Guest Author in The Big Picture on 2013-05-19 15:00:47

    Citations

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    Cited by:

    1. Kose,Ayhan & Ohnsorge,Franziska Lieselotte & Ye,Lei Sandy & Islamaj,Ergys, 2017. "Weakness in investment growth : causes, implications and policy responses," Policy Research Working Paper Series 7990, The World Bank.
    2. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France.
    3. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2015. "How Fast are Semiconductor Prices Falling?," NBER Working Papers 21074, National Bureau of Economic Research, Inc.
    4. repec:aei:rpaper:37301 is not listed on IDEAS
    5. Roberto Cardarelli & Lusine Lusinyan, 2015. "U.S. Total Factor Productivity Slowdown; Evidence from the U.S. States," IMF Working Papers 15/116, International Monetary Fund.
    6. Gilbert CETTE, 2015. "Which Role for ICTs as a Productivity Driver Over the Last Years and the Next Future?," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(100), pages 65-83, 4th quart.
    7. 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, pages 20-36.
    8. 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, pages 20-36.
    9. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    10. Florian MAYNERIS & Loriane PY, 2013. "The Efficiency Of Enterprise Zone Programs Some Conflicting Results?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, pages 209-224.
    11. Castiglione, Concetta & Infante, Davide, 2014. "ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms," Economic Modelling, Elsevier, vol. 41(C), pages 55-65.
    12. Dale W. Jorgenson & Mun S. Ho & Jon D. Samuels, 2017. "Educational Attainment and the Revival of U.S. Economic Growth," NBER Chapters,in: Education, Skills, and Technical Change, and Future U.S. GDP Growth National Bureau of Economic Research, Inc.
    13. Cette, G., 2014. "Does ICT remain a powerful engine of growth?," Working papers 476, Banque de France.
    14. Castiglione, Concetta & Infante, Davide, 2012. "ICTs and lags in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms," MPRA Paper 51071, University Library of Munich, Germany.

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