The productivity growth slowdown and Kaldor’s growth facts

Georg Duernecker, Berthold Herrendorf and Ákos Valentinyi

Journal of Economic Dynamics and Control, 2021, vol. 130, issue C

Abstract: The productivity growth slowdown that started in the 1970s presents a challenge to Kaldor’s growth facts and the one-sector growth model. We ask: What natural modification of the growth model can generate a prolonged productivity growth slowdown? We show that the two-sector version with separate consumption and investment sectors has a balanced growth path equilibrium along which productivity growth slows down if two conditions hold: real GDP is measured with the Fisher index; productivity growth in the consumption sector slows down. We also show that real GDP measured with the Fisher index is a welfare measure in the two-sector version.

Keywords: Fisher index; Kaldor’s growth facts; Productivity growth slowdown; Two-sector growth model (search for similar items in EconPapers)
JEL-codes: O41 O47 O51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:130:y:2021:i:c:s0165188921001354

DOI: 10.1016/j.jedc.2021.104200

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