Labour Productivity Growth Slowdown: An Effect of Economic Stagnation Rather than its Cause?
Acta Oeconomica, 2017, vol. 67, issue supplement1, 67-77
This paper reports the results of an econometric examination on the links between labour productivity and output growth for 22 countries (for which long-term data are available). It turns out that, generally, labour productivity does not “cause” output. In more cases, the causation seems to be running in the opposite direction: from output to productivity. This finding, though inconsistent with the “mainstream” ideas on the sources of long-term economic growth, is reminiscent of the classical Kaldor-Verdoorn Law. The progressing slowdown in output growth on the global level, initiated around the mid-1970s (when the process of discarding the earlier economic policy paradigms set in), may have been mirrored by the progressing slowdown in productivity growth (and that despite the hardly disputable acceleration of technological progress).
Keywords: labour productivity; economic growth; Kaldor-Verdoorn Law; Granger causality (search for similar items in EconPapers)
JEL-codes: O40 O49 O57 (search for similar items in EconPapers)
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