Regulation and Productivity Growth: Are We in a New Productivity Slowdown?

John Dawson

Economics Bulletin, 2020, vol. 40, issue 1, 188-201

Abstract: This paper updates the empirical evidence on the role of federal regulation and taxes in the well-known productivity slowdown of the 1970s, based on revised and extended data on federal regulation and marginal tax rates through 2016 in the U.S. The analysis uses a time-series model derived from endogenous growth theory with regulation and taxes as policy variables. Co-movement among the policy variables and productivity growth—during both the slowdown and the subsequent recovery—suggests regulation may have played a role. Tax effects are small and statistically insignificant. The updated results also suggest a new productivity slowdown is underway, since the early-2000s, and that regulation may once again have something to do with it.

Keywords: Regulation; taxes; macroeconomic performance; productivity slowdown (search for similar items in EconPapers)
JEL-codes: L5 O4 (search for similar items in EconPapers)
Date: 2020-02-05
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Citations: View citations in EconPapers (1)

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