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The Productivity Puzzle – A Critical Assessment and an Outlook on the COVID-19 Crisis

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  • Roth, Felix

Abstract

This paper assesses the productivity puzzle critically and gives an outlook on the COVID-19 crisis. It offers two main conclusions. First, it posits that a large fraction of the productivity puzzle can be solved by incorporating intangible capital into the asset boundary of the national accounts. Thus, the productivity puzzle is largely explained as a consequence of fundamental structural changes that are underway, transforming industrial economies into knowledge economies. Secondly, the contribution foresees a post-COVID-19 scenario that will likely lead to a pronounced increase in labour productivity growth. This depends, however, on whether the current push for digitization will be backed by actual investments into digitization and the necessary complementary investments in (business and public) intangible capital.

Suggested Citation

  • Roth, Felix, 2021. "The Productivity Puzzle – A Critical Assessment and an Outlook on the COVID-19 Crisis," Hamburg Discussion Papers in International Economics 8, University of Hamburg, Chair of International Economics.
  • Handle: RePEc:zbw:uhhhdp:8
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    More about this item

    Keywords

    productivity puzzle; intangible capital; labour productivity growth; structural change; COVID-19 crisis; re-measurement of GDP;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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