World Productivity: 1996 - 2014

Mehrdad Esfahani, John Fernald (john.fernald@insead.edu) and Bart Hobijn

No 2020-17, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We account for the sources of world productivity growth, using data for more than 36 industries and 40 major economies from 1996 to 2014, explicitly taking into account changes in the misallocation of resources in labor, capital, and product markets. Productivity growth in advanced economies slowed but emerging markets grew more quickly which kept global productivity growth relatively constant until around 2010. After that, productivity growth in all major regions slowed. Much of the volatility in world productivity growth reflects shifts in the misallocation of labor across countries and industries. Using new data on PPP-based value-added measures by country and industry, we show that about a third of these shifts is due to employment growing in countries, most notably China and India, that benefit from an international cost advantage. Markups are large and rising and impact the imputed misallocation of capital. However, they have little effect on the country-industry technology contribution to global productivity.

Keywords: Growth accounting; misallocation; productivity; purchasing power parity; world economy (search for similar items in EconPapers)
JEL-codes: F43 O47 O50 (search for similar items in EconPapers)
Pages: 68
Date: 2020-03-13
New Economics Papers: this item is included in nep-eff and nep-opm
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: World Productivity: 1996–2014 (2024)
Working Paper: World Productivity: 1996 - 2014 (2022)
Working Paper: World Productivity: 1996-2014 (2019)
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DOI: 10.24148/wp2020-17

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