NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

International Comparison of the Sources of Productivity Slowdown 1973 1982

John F. Helliwell, Peter Sturm, Gerard Salou

NBER Working Paper No. 1465 (Also Reprint No. r0658)
Issued in September 1984
NBER Program(s):   ITI   IFM

This paper uses an integrated model of aggregate supply to analyze the post-1973 slowdown in productivity growth in the seven major OECD economies. Factor substitution, unexpected demand changes, profitability, and inventory disequilibrium all contribute to the explanation, which is based on a three-factor nested aggregate production function, including energy, and postulating Harrod-neutral disembodied technical progress. The model is first applied separately to the seven countries assuming constant (though country-specific) rates of technical progress. This model provides empirical evidence that this rate of progress has in fact slowed down for several of the faster-growing countries, even after adjusting for factor substitution and cyclical factors. The model is therefore re-estimated, and the sources of productivity decline recalculated, on the hypothesis that rates of efficiency growth in other countries are converging to those in the United States.

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Document Object Identifier (DOI): 10.3386/w1465

Published: Helliwell, John F., Peter H. Sturm, and Gerard Salou. "International Comparison of the Sources of Productivity Slowdown 1973-1982." European Economic Review, Vol. 28, 1-2 (1985), pp. 157-191. citation courtesy of

 
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