A Quarterly, Utilization-Adjusted Series on Total Factor Productivity

Abstract

This paper describes a real-time, quarterly growth-accounting database for the U.S. business sector. The data on inputs, including capital, are used to produce a quarterly series on total factor productivity (TFP). In addition, the dataset implements an adjustment for variations in factor utilization-labor effort and the workweek of capital. The utilization adjustment follows Basu, Fernald, and Kimball (BFK, 2006) as updated in Basu, Fernald, Fisher, and Kimball (BFFK, 2013). Using relative prices and input-output information, the series are also decomposed into separate TFP and utilization-adjusted TFP series for equipment investment (including consumer durables) and "consumption" (defined as business output less equipment and consumer durables).

Quantifying Confidence

“…In the one, we regress each variable of interest on the current level and the four lags of TFP, as measured by Fernald (2014), and extract the residuals. In the other, we include all the variables in a SVAR; identify the technology shock as in Galí (1999), that is, as the only shock that exerts an effect on labor productivity in the longrun; and then take the residuals from the projection of the data on the identified technology shock.…”

“…Given that the effective federal funds rate is available at the monthly frequency, we use the average over the quarter (denoted FEDFUNDS). Finally, when relevant, Total Factor Productivity (TFP) is measured as in Fernald (2014), which adjusts for utilization.…”

The productivity gap: Monetary policy, the subprime boom, and the post-2001 productivity surge

“…As Figure 1 shows, between 1970 and 2006 the total factor productivity (TFP) growth ranged from as high as 5.6 percent to as low as -4.2 percent, with many relatively sharp swings (Fernald, 2009). The most recent of these swings, the productivity "surge" that began in the mid-1990s, was interrupted by the dot.com crash, after which it resumed with greater vigor until 2004.…”

Aggregate impacts of recent US natural gas trends

“…This is followed by an average rate of growth of 1.32% from 1950 to 1964, 1.25% from 1996 to 2007, and 1.16% from 1964 to 1972. The highest average rate of growth in the Fernald (2012) series is between 1950 to 1964, at 2.18%. This is followed by a 1.65% average rate of growth from 1964 to 1972, 1.10% from 1996 to 2007, and 1.06% from 1972 to 1979. There is a clear pattern in either series that average economy-wide productivity gains are higher until 1972higher until , fall from 1972higher until -1996higher until , and then rise again after 1996higher until .…”

“…The intervals are based on Gordon (2010), with the second column the adjusted MFP growth rates for the non-farm non-housing business sector. The third column lists MFP growth rates, adjusted for utilization, over the same intervals based on the data series provided by Fernald (2012) for the business sector.…”