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Sectoral productivity in the United States: recent developments and the role of IT

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  • Eric J. Bartelsman
  • J. Joseph Beaulieu
  • Carol Corrado
  • Paul Lengermann

Abstract

This paper introduces new estimates of recent productivity developments in the United States, using an appropriate theoretical framework for aggregating industry MFP to sectors and the total economy. Our work sheds light on the sources of the continued strong performance of U.S. productivity since 2000. We find that the major sectoral players in the late 1990s pickup were not contributors to the more recent surge in productivity. Rather, striking gains in MFP in the finance and business service sector, a resurgence in MFP growth in the industrial sector, and an end to drops elsewhere more than account for the aggregate acceleration in productivity in recent years. Further, some evidence is found for a link between IT intensity and the recent productivity acceleration.

Suggested Citation

  • Eric J. Bartelsman & J. Joseph Beaulieu & Carol Corrado & Paul Lengermann, 2007. "Sectoral productivity in the United States: recent developments and the role of IT," Finance and Economics Discussion Series 2007-24, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:2007-24
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    References listed on IDEAS

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    Cited by:

    1. Dale Jorgenson & Mun Ho & Jon Samuels & Kevin Stiroh, 2007. "Industry Origins of the American Productivity Resurgence," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 229-252.
    2. Gordon, Robert J & Sayed, Hassan, 2019. "The Industry Anatomy of the Transatlantic Productivity Growth Slowdown," CEPR Discussion Papers 13751, C.E.P.R. Discussion Papers.
    3. Raquel Ortega‐Argilés & Mariacristina Piva & Marco Vivarelli, 2014. "The transatlantic productivity gap: Is R&D the main culprit?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1342-1371, November.
    4. Robert J. Gordon & Hassan Sayed, 2019. "The Industry Anatomy of the Transatlantic Productivity Growth Slowdown," NBER Working Papers 25703, National Bureau of Economic Research, Inc.
    5. Frank Leung & Gaofeng Han & Kevin Chow, 2009. "Financial Services Sector as a Driver of Productivity Growth in Hong Kong," Working Papers 0914, Hong Kong Monetary Authority.
    6. Fugazza, Carolina & Giofré, Maela & Nicodano, Giovanna, 2011. "International diversification and industry-related labor income risk," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 764-783, October.
    7. Eric J. Bartelsman & Zoltan Wolf, 2017. "Measuring Productivity Dispersion," Tinbergen Institute Discussion Papers 17-033/VI, Tinbergen Institute.
    8. Kyoji Fukao & Tsutomu Miyagawa & Kentaro Mukai & Yukio Shinoda & Konomi Tonogi, 2008. "Intangible Investment in Japan: New Estimates and Contribution to Economic Growth," Global COE Hi-Stat Discussion Paper Series gd08-015, Institute of Economic Research, Hitotsubashi University.
    9. Susanto Basu & John G. Fernald, 2008. "Information and communications technology as a general purpose technology: evidence from U.S. industry data," Economic Review, Federal Reserve Bank of San Francisco, pages 1-15.
    10. Robert J. Gordon & Hassan Sayed, 2020. "Transatlantic Technologies: The Role of ICT in the Evolution of U.S. and European Productivity Growth," NBER Working Papers 27425, National Bureau of Economic Research, Inc.
    11. Danny Leung & Yi Zheng, 2012. "What affects MFP in the long-run? Evidence from Canadian industries," Applied Economics, Taylor & Francis Journals, vol. 44(6), pages 727-738, February.
    12. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
    13. Ida D'Attoma & Silvia Pacei, 2018. "Evaluating the Effects of Product Innovation on the Performance of European Firms by Using the Generalised Propensity Score," German Economic Review, Verein für Socialpolitik, vol. 19(1), pages 94-112, February.
    14. Böhringer, Christoph & Moslener, Ulf & Oberndorfer, Ulrich & Ziegler, Andreas, 2012. "Clean and productive? Empirical evidence from the German manufacturing industry," Research Policy, Elsevier, vol. 41(2), pages 442-451.
    15. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920, September.
    16. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    17. Eric Bartelsman & Eva Hagsten & Michael Polder, 2018. "Micro Moments Database for cross‐country analysis of ICT, innovation, and economic outcomes," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 626-648, September.
    18. Ajayi, V. & Dolphin, G. & Anaya, K. & Pollitt, M., 2020. "The Productivity Puzzle in Network Industries: Evidence from the Energy Sector," Cambridge Working Papers in Economics 2073, Faculty of Economics, University of Cambridge.
    19. Susan N. Houseman & Christopher J. Kurz & Paul Lengermann & Benjamin R. Mandel, 2010. "Offshoring bias in U.S. manufacturing: implications for productivity and value added," International Finance Discussion Papers 1007, Board of Governors of the Federal Reserve System (U.S.).

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    Keywords

    Industrial productivity; Information technology;

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