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Recent Productivity Developments in Canada and the United States: Productivity Growth Deceleration versus Acceleration

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  • Andrew Sharpe

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Abstract

Since 2000, productivity growth in Canada and the United States have followed markedly different paths. In the second article, Andrew Sharpe of the Centre for the Study of Living Standards finds that the remarkable productivity growth experienced in the United States in the past two years is most likely evidence of a post- 2000 productivity growth acceleration, similar to the post-1995 acceleration. The source of this second acceleration appears to be the rapid pace of technological change, fostered by pressures on firms to cut costs, organizational changes that allow the productivity-enhancing potential of ICTs to be realized, and the cheapening of the price of capital goods relative to labour. In contrast, productivity growth in Canada decelerated after 2000. The source of the difference with the U.S. performance has been the labour market, with employment declining in the United States but showing strong increases in Canada. Sharpe states that Canada’s poor productivity growth since 2000 has largely been a cyclical phenomenon, and that Canadian productivity growth should rebound as the economy recovers.

Suggested Citation

  • Andrew Sharpe, 2004. "Recent Productivity Developments in Canada and the United States: Productivity Growth Deceleration versus Acceleration," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 16-26, Spring.
  • Handle: RePEc:sls:ipmsls:v:8:y:2004:2
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    File URL: http://www.csls.ca/ipm/8/sharpe-e.pdf
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    File URL: http://www.csls.ca/ipm/8/sharpe-f.pdf
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    References listed on IDEAS

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    1. Jeremy Smith, 2004. "Assessing Aggregate Labour Productivity Trends in Canada and the United States: Total Economy versus Business Sector Perspectives," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 47-58, Spring.
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    Citations

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    Cited by:

    1. Jean-Francois Arsenault & Andrew Sharpe, 2008. "An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 14-39, Spring.
    2. van Norden, Simon, 2011. "Current trends in the analysis of Canadian productivity growth," The North American Journal of Economics and Finance, Elsevier, vol. 22(1), pages 5-25, January.
    3. Jeremy Smith, 2004. "Assessing Aggregate Labour Productivity Trends in Canada and the United States: Total Economy versus Business Sector Perspectives," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 47-58, Spring.
    4. Jeremy Smith, 2004. "Aggregate Labour Productivity Growth in Canada and the United States: Definitions, Trends and Measurement Issues," CSLS Research Reports 2004-04, Centre for the Study of Living Standards.
    5. Someshwar Rao & Andrew Sharpe & Jeremy Smith, 2005. "An Analysis of the Labour Productivity Growth Slowdown in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 3-23, Spring.

    More about this item

    Keywords

    Labour Productivity; Productivity; Productivity Growth; Investment; Information Technology; Information and Communication Technologies; Canada; United States; Acceleration; Productivity Growth Acceleration; Post-2000; Post-1995;

    JEL classification:

    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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