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Drift and breaks in labor productivity

Luca Benati ()

No 718, Working Paper Series from European Central Bank

Abstract: We use tests for multiple breaks at unknown points in the sample, and the Stock-Watson (1996, 1998) time-varying parameters median-unbiased estimation methodology, to investigate changes in the equilibrium rate of growth of labor productivity-both per hour and per worker-in the United States, the Eurozone, the United Kingdom, Australia, and Japan over the post-WWII era. Results for the U.S. well capture the 'conventional wisdom' of a golden era of high productivity growth, the 1950s and 1960s; a marked deceleration starting from the beginning of the 1970s; and a strong growth resurgence starting from mid-1990s. Evidence clearly suggests the 1990s' productivity acceleration to have reached a plateau over the last few years. Results for the Eurozone point towards a marked deceleration since the beginning of the 1980s, with equilibrium productivity growth stabilising over the most recent period. JEL Classification: E30, E32

Keywords: bootstrapping; frequency domain; median-unbiased estimation; Monte Carlo integration.; Structural break tests; time-varying parameters; variance ratio (search for similar items in EconPapers)
Date: 2007-01
Note: 802546
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Journal Article: Drift and breaks in labor productivity (2007) Downloads
Working Paper: Drift and Breaks in Labour Productivity (2006) Downloads
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