Revisiting recent productivity developments across OECD countries
BIS Working Papers No 182
This paper compares productivity developments across industrial countries based on official OECD data in the business sector. It discusses the uncertainties surrounding the measurement of both productivity levels and productivity growth, and then focuses on changes in productivity growth. The paper analyses labour productivity patterns and trends of total factor productivity (TFP) across countries. The recent performance of the United States clearly stands out. In particular, the level of US labour productivity appears to be the highest among the major industrial countries and has been rising the fastest in the recent past. Despite substantial uncertainties surrounding these international comparisons, there is little doubt that the US performance has improved sharply in relative terms. Productivity has accelerated in the United States but decelerated in most other industrial economies. Indeed, only a few countries have experienced a structural improvement in their productivity performance over recent years. Moreover, rather than just reflecting stronger capital accumulation, the US performance has been associated with a higher rate of technological progress that was maintained during the latest recession. In contrast, the accumulation of capital has been quite strong in most other major industrial economies. This might be a source of concern in some places, given the observed trend decline in the rate of technical progress.
JEL Classification Numbers: O50, O47, Q30, N10, F01, E32, C20, C82
Keywords: productivity, international comparisons, industrial countries, statistical uncertainty, technological progress, labour force, capital stock, time trend, business cycle