Cyclical Downturn or Slowing Trend? A Review Article on Productivity Puzzles across Europe

John Fernald ()

International Productivity Monitor, 2018, vol. 34, 110-117

Abstract: Productivity Puzzles across Europe examines European productivity before, during, and since the Great Financial Crisis, with a special focus on country-specific labour-market institutions. This review emphasizes first, that European productivity growth has been slowing for decades - it is not just a recession and post-recession phenomenon. Second, the book's analysis of labour markets, which highlights incentives to hoard labour, is relevant for understanding cyclical fluctuations in total factor productivity (TFP) around that trend. For example, institutions in Germany encouraged use of intensive margins (hours per worker and maybe effort), so measured TFP fell sharply in the recession but then rebounded quickly. The labour-market analysis in the book sheds little light on the slowing TFP trend.

Keywords: Recession; Downturn; Europe; Cyclical; Slowdown; Productivity; Productivity Puzzle; Review; Productivity Puzzles across Europe (search for similar items in EconPapers)
JEL-codes: D24 E20 N34 O52 Y3 (search for similar items in EconPapers)
Date: 2018
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