Why is productivity slowing down?
François Lafond () and
MPRA Paper from University Library of Munich, Germany
The recent decline in aggregate labor productivity growth in leading economies has been widely described as a puzzle, even a paradox, leading to extensive research into possible explanations. Our review confirms the magnitude of the slowdown and finds that it is largely driven by a decline in total factor productivity and capital deepening. Disaggregation reveals that a significant part of the slowdown is due to sectors that experienced the large benefits from ICTs in the previous period, and that an increasing gap between frontier and laggard firms suggests slower technology diffusion and increasing misallocation of factors. We evaluate explanations that attempt to reconcile the paradox of slowing productivity growth and technological change, including mismeasurement, implementation lags for technologies, and creative destruction processes.
Keywords: productivity growth; secular stagnation; economic growth (search for similar items in EconPapers)
JEL-codes: D24 E66 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-mac and nep-tid
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