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The Breaks in per Capita Productivity Trends in a Number of Industrial Countries

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  • Maury, P-M.
  • Pluyaud, B.

Abstract

The purpose of this article is to study the trends in per capita productivity in several major industrialised countries. The analysis is first based on annual data over a long period spanning the entire 20th century for the United States, France and the United Kingdom. Productivity trends are then studied over a shorter period, using quarterly data, for the United States, France, the United Kingdom, Germany, Spain, Japan and the Netherlands. There are already a large number of studies of this kind, but they are too often focused on presenting average productivity growth rates for given periods chosen on an ad hoc basis. In this article, we use a robust statistical method to endogenously identify possible breaks in per capita productivity trends. This method, developed by Bai and Perron (1998), brings out the following salient features: – in the United States, per capita productivity growth accelerated following the trend break at the start of the 1920s, then slowed down at the end of the 1960s. This finding is in line with the “Big Wave” concept developed by Gordon (1999, 2002) to describe the trends in US productivity growth throughout the 20 th century. – French and UK productivity started catching up with that in the United States around the end of the Second World War. – Most of the countries under review recorded slower trend productivity growth in the first half of the 1970s. In the United States, this break occurred in 1966. This finding differs from that of other existing analyses, which point to 1974. – Trend productivity growth in Europe and Japan slowed in the 1990s, whereas US productivity gained momentum over the same period.

Suggested Citation

  • Maury, P-M. & Pluyaud, B., 2004. "The Breaks in per Capita Productivity Trends in a Number of Industrial Countries," Working papers 111, Banque de France.
  • Handle: RePEc:bfr:banfra:111
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    References listed on IDEAS

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    1. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    2. Basu, Susanto & Fernald, John G. & Shapiro, Matthew D., 2001. "Productivity growth in the 1990s: technology, utilization, or adjustment?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 117-165, December.
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    5. Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-856, July.
    6. Wouter J. den Haan & Andrew T. Levin, 2000. "Robust Covariance Matrix Estimation with Data-Dependent VAR Prewhitening Order," NBER Technical Working Papers 0255, National Bureau of Economic Research, Inc.
    7. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    8. Gust, Christopher & Marquez, Jaime, 2004. "International comparisons of productivity growth: the role of information technology and regulatory practices," Labour Economics, Elsevier, vol. 11(1), pages 33-58, February.
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    Cited by:

    1. Bruno Tissot & Les Skoczylas, 2005. "Revisiting recent productivity developments across OECD countries," BIS Working Papers 182, Bank for International Settlements.
    2. Clément Bosquet & Michel Fouquin, 2008. "Productivité du travail : la fin du processus de convergence ?," Économie et Statistique, Programme National Persée, vol. 419(1), pages 125-142.
    3. Mesonnier, Jean-Stephane & Renne, Jean-Paul, 2007. "A time-varying "natural" rate of interest for the euro area," European Economic Review, Elsevier, vol. 51(7), pages 1768-1784, October.
    4. Mésonnier, J-S. & Renne, J-P., 2004. "A Time-Varying Natural Rate for the Euro Area," Working papers 115, Banque de France.
    5. 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.
    6. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    7. Alexander Murray, 2017. "What Explains the Post-2004 U.S.Productivity Slowdown?," CSLS Research Reports 2017-05, Centre for the Study of Living Standards.

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    More about this item

    Keywords

    Productivity trends ; Structural breaks ; Bai and Perron method;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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