DP305 Measurement Issues, the Productivity Slowdown and the Explosion of Computer Power

Author(s): Martin Baily, Robert J Gordon
Publication Date: April 1989
Keyword(s): Computers, Growth, Measurement Error, Productivity, Technological Change
JEL(s): 226, 621, 825
Programme Areas: Applied Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=305

One of the starkest differences between the recent economic performance of the US and of Europe, in addition to faster job creation in the US, is its slower productivity growth. This paper begins with data showing that US productivity growth has been essentially zero since 1973 outside of manufacturing. In contrast, productivity growth in US manufacturing has revived since 1979, and over the period 1979-87 has actually been more rapid than during the 1948-73 'golden age'.