The Global Productivity Slump: Common and Country-Specific Factors
Productivity growth is slowing around the world. In 2014, according to the Conference Board’s Total Economy Data Base, the growth of total factor productivity (TFP) hovered around zero for the third straight year, down from 1 per cent in 1996-2006 and ½ per cent in 2007-12. In this paper we identify previous episodes of sharp and sustained decelerations in TFP growth using data for a large sample of countries and years. TFP slumps are ubiquitous: we find as many as 77 such episodes, depending on definition, in low-, middle- and high-income countries. Low levels of educational attainment, unusually high investment rates and weak political systems are among the significant country-specific correlates of TFP slumps, while increases in risk (higher TED spreads) and energy-price shocks are among the significant global factors.
This paper was prepared as background material for the Asian Development Outlook 2015 Update. We thank Yooran Shin and Jisoo Kim for their excellent research assistance, and the Asian Development Bank for financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Barry Eichengreen & Donghyun Park & Kwanho Shin, 2017. "The Global Productivity Slump: Common and Country-Specific Factors," Asian Economic Papers, vol 16(3), pages 1-41. citation courtesy of