International Comparison of the Sources of Productivity Slowdown 1973 1982

John Helliwell, Peter Sturm and Gerard Salou

No 1465, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses an integrated model of aggregate supply to analyze the post-1973 slowdown in productivity growth in the seven major OECD economies. Factor substitution, unexpected demand changes, profitability, and inventory disequilibrium all contribute to the explanation, which is based on a three-factor nested aggregate production function, including energy, and postulating Harrod-neutral disembodied technical progress. The model is first applied separately to the seven countries assuming constant (though country-specific) rates of technical progress. This model provides empirical evidence that this rate of progress has in fact slowed down for several of the faster-growing countries, even after adjusting for factor substitution and cyclical factors. The model is therefore re-estimated, and the sources of productivity decline recalculated, on the hypothesis that rates of efficiency growth in other countries are converging to those in the United States.

Date: 1984-09
Note: ITI IFM
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Published as Helliwell, John F., Peter H. Sturm, and Gerard Salou. "International Comparison of the Sources of Productivity Slowdown 1973-1982." European Economic Review, Vol. 28, 1-2 (1985), pp. 157-191.

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Journal Article: International comparison of the sources of productivity slowdown 1973-1982 (1985)
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