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Lessons from the latest data on U.S. productivity

Author

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  • Jan P. A. M. Jacobs
  • Simon van Norden

Abstract

Productivity growth is carefully scrutinized by macroeconomists because it plays key roles in understanding private savings behaviour, the sources of macroeconomic shocks, the evolution of international competitiveness and the solvency of public pension systems, among other things. However, estimates of recent and expected productivity growth rates suffer from two potential problems: (i) recent estimates of growth trends are imprecise, and (ii) recently published data often undergo important revisions. This paper documents the statistical (un)reliability of several measures of aggregate productivity growth in the U.S. by examining the extent to which they are revised over time. The authors also examine the extent to which such revisions contribute to errors in forecasts of U.S. productivity growth. The authors find that data revisions typically cause appreciable changes in published estimates of productivity growth rates across a range of different productivity measures. Substantial revisions often occur years after the initial data release, which they argue contributes significantly to the overall uncertainty policymakers face. This emphasizes the need for means of reducing the uncertainty facing policymakers and policies robust to uncertainty about current economic conditions.>

Suggested Citation

  • Jan P. A. M. Jacobs & Simon van Norden, 2010. "Lessons from the latest data on U.S. productivity," Working Papers 11-1, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:11-1
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    More about this item

    Keywords

    Productivity - United States; Statistics; Real-time data;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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