The Sources of Growth in a Technologically Progressive Economy: The United States, 1899–1941

Bakker, Gerben; Crafts, Nicholas; Woltjer, Pieter

doi:10.1093/ej/uez002

Cited by 33 publications

(26 citation statements)

References 54 publications

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“…Historical analysis has focussed on productivity trends in previous technology phases (Bakker et al, 2019;Crafts, 2004). Recent literature has shown that the information and communication technology (ICT) revolution of the past 50 years can be characterised as a GPT and doesn't pale with previous GPTs such as steam technology, electricity and the combustion engine.…”

Section: The Productivity Paradox Of the New Digital Economymentioning

confidence: 99%

How to Not Miss a Productivity Revival Once Again

Ark

Vries

Erumban

2021

NIER

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Over the past 15 years, productivity growth in advanced economies has significantly slowed, giving rise to the productivity paradox of the New Digital Economy – that is, the notion of increased business spending on information and communication technology assets and digital services without a noticeable increase in productivity. We argue that time lags are the most important reason for the slow emergence of the productivity effects from digital transformation. This paper provides evidence that underneath the slowing productivity growth rates at the macro level, signs of structural improvements can be detected. In the United States most of the positive contribution to productivity growth is coming from the digital producing sector. The Euro Area and the United Kingdom show larger productivity contributions from the most intensive digital-using sectors, although the United Kingdom also had a fairly large number of less intensive digital-using industries which showed productivity declines. We also find that increases in innovation competencies of the workforce are concentrated in industries showing faster growth in labor productivity, even though more research is needed to identify causality. Finally, we speculate that as the recovery from the COVID-19 recession gets underway the potential for significant productivity gains from digital transformation in the medium term is larger than during the past 15 years.

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Section: The Productivity Paradox Of the New Digital Economymentioning

confidence: 99%

How to Not Miss a Productivity Revival Once Again

Ark

Vries

Erumban

2021

NIER

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“…Field (2003) andAlexopoulos and Cohen (2009) argue that the 1930s were the single most innovative U.S. decade of the 20 th century Gordon (2016). andBakker et al (2019) provide (different) updated time series estimates of U.S. TFP growth to argue that, while the 1930s were an innovative period (with faster TFP growth than the decades preceding it), it was less innovative than the decades that followed (during and immediately after World War II).18 In standard neoclassical growth models, a permanent change in the level of employment would not affect steadystate capital per worker. Of course, changes in risk premia or other factors affecting the relative cost of capital to labor would affect capital per worker.…”

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confidence: 99%

Does Disappointing European Productivity Growth Reflect a Slowing Trend? Weighing the Evidence and Assessing the Future

Fernald

Inklaar²

2020

ERWP

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In the years since the Great Recession, many observers have highlighted the slow pace of labor and total factor productivity (TFP) growth in advanced economies. This paper focuses on the European experience, where we highlight that trend TFP growth was already low in the runup to the Global Financial Crisis (GFC). This suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. After the mid-1990s, European economies stopped converging, or even began diverging, from the U.S. level of TFP. That said, in contrast to the United States, there is some macroeconomic evidence for some northern European countries that the GFC had a further adverse impact on TFP growth. Still, the challenges for economic policy look surprisingly similar to the ones discussed prior to the Great Recession, even if the policy implications seem less clear.

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“…It is also true that a comparison with the United States in the interwar period also looks a bit better partly because new research has revised downwards American TFP growth by taking fuller account of labour quality than was done by Kendrick (1961). Whereas comparing Matthews et al for 1924to 1937with Kendrick for 1919to 1941 showed UK TFP growth at 0.2 per cent versus US TFP growth at 2.16 per cent per year, the new estimates are 0.41 per cent for the UK compared with 1.76 per cent per year for the United States according to Bakker et al (2019). That said, UK productivity growth is still a long way below the American level and this remains a big caveat on optimistic interpretations of interwar British performance.…”

Section: Discussionmentioning

confidence: 92%