Long Productivity

Posted by: Michael Mandel on November 03

After today’s unexpected good productivity numbers, I decided to see what twenty-year productivity growth looks like. Here is the chart:

long productivity_24195_image001.gif

That’s pretty impressive. The twenty year time period should wash out a lot of the impact of business cycles. Still, the line turns up at, ta-da!, the beginning of 1997—or the beginning of the New Economy.

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Reader Comments

David Foster

November 3, 2005 05:46 PM

The productivity being measured here is specifically *labor* productivity..am I correct? It would be interesting to see trends on the productivity of capital assets, as well.

Mike Mandel

November 4, 2005 11:10 AM

Yes, it's labor productivity. Interestingly enough, capital productivity has been falling since the mid 1960s, but the rate of decline has decisively slowed in recent years.

20 year growth rate of capital productivity
period ending
1972 -0.1%
1982 -1.2%
1992 -1.1%
2002 -0.3%

Nick

November 4, 2005 12:43 PM

I have been trying to calculate productivity at the state level. So far Real GSP/Employment seems to work the best. This puts productivity in terms of average value of output per employee. This number is low because GSP excludes federal employee compensation, but they are included in employment. The annual average weekly hours data is not available for total employment so it is impossible to convert to output per hour at the state level. It is interesting to rank GSP per employee by state.

Lord

November 5, 2005 12:20 PM

How much of this is demographics, say the population of 35 to 50 year olds when people are more skilled in their careers?

spencer

December 2, 2005 03:56 PM

I would think that something like a 50 year chart would be more informative. It would show that the 1975-95 slowdown was the exception, not the rule. Moreover, the recent productivity miracle is just a rebound to historic norms.

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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