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Does the United States Have a Productivity Slowdown or a Measurement Problem?
Report

Does the United States Have a Productivity Slowdown or a Measurement Problem?

David M. Byrne, John G. Fernald and Marshall B. Reinsdorf
Brookings Institution, 2016
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Editorial Rating

8

Qualities

  • Innovative

Recommendation

Growth in US productivity has been decelerating since 2004, after a surge starting in the mid-1990s. This seems illogical, considering the technological progress that appears to have boosted efficiency. Could official statistics be missing some aspects of new technologies that make people and businesses more productive but that don’t show up in the metrics? Economists David M. Byrne, John G. Fernald and Marshall B. Reinsdorf find that the mismeasurement of various facets of GDP input may not be the likely story behind the perceived slowdown. getAbstract recommends this technical but informative and topical report to economists, policy makers and executives.

Summary

Growth in labor productivity and total factor productivity has been decelerating in the United States since 2004, after a notable rise starting in the mid-1990s. The productivity slowdown represents a loss of as much as $3 trillion annually in commercial output from 2004 to 2015. The stagnation has been widespread, noted in industries as broad ranging as retail and wholesale trade, manufacturing and utilities. The deceleration seems counterintuitive, given the advances in information technology that appear to make consumers and businesses more productive...

About the Authors

David M. Byrne, John G. Fernald and Marshall B. Reinsdorf are economists at the Federal Reserve Board, the Federal Reserve Bank of San Francisco and the International Monetary Fund, respectively.

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