Productivity growth in the 1990s: technology, utilization, or adjustment

Susanto Basu, John Fernald () and Matthew Shapiro

No WP-01-04, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: Measured productivity growth increased substantially during the second half of the 1990s. This paper examines whether this increase owes to an increase in the rate of technological change or whether it can be explained by non-technological factors relating to factor utilization, factor accumulation, or returns to scale. It finds that the recent increase in productivity growth does appear to arise from an increase in technological change. Cyclical utilization raised measured productivity growth relative to technology growth in the first part of the expansion, but lowered it subsequently. Factor adjustment leads to a steady-state understatement of technology growth by measured productivity growth. The understatement was greater in the second half of the expansion than the first. Changes in the distribution of inputs across industries with different returns to scale lead to a modest understatement in the growth in technology. Although the increase technological change is most pronounced in durable manufacturing, technological change also increased outside of manufacturing.

Keywords: Productivity; Technology; Manufactures (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-dge, nep-eff, nep-ino and nep-tid
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Citations: View citations in EconPapers (34)

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Journal Article: Productivity growth in the 1990s: technology, utilization, or adjustment? (2001)
Working Paper: Productivity Growth in the 1990s: Technology, Utilization, or Adjustment? (2001)
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