The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends?

John Fernald (), Robert Inklaar and Dimitrije Ruzic ()

No 2023-07, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: This paper reviews advanced-economy productivity developments in recent decades. We focus primarily on the facts about, and explanations for, the mid-2000s labor-productivity slowdown in large European countries and the United States. Slower total factor productivity growth was the proximate cause of the slowdown. This conclusion is robust to measurement challenges including the role of intangible assets, rankings of productivity levels, and data revisions. We contrast two main narratives for the stagnating productivity frontier: The shock of the Global Financial Crisis; and a common slowdown in productivity trends. Distinguishing these two empirically is hard, but the pre-recession timing of the U.S. slowdown suggests an important role for the common-trend explanation. We also discuss the unusual pattern of productivity growth since the start of the Covid-19 pandemic. Although it is early, there is little evidence so far that the large pandemic shock has changed the slow pre-pandemic trajectory of productivity growth.

Keywords: productivity growth; Great Recession; convergence (search for similar items in EconPapers)
JEL-codes: D24 E23 E44 F45 O47 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2023-02-26
New Economics Papers: this item is included in nep-des, nep-eff, nep-inv and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.frbsf.org/wp-content/uploads/sites/4/wp2023-07.pdf Full text - article PDF (application/pdf)

Related works:
Journal Article: The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends? (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:95734

Ordering information: This working paper can be ordered from

DOI: 10.24148/wp2023-07

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().