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U.S. Total Factor Productivity Slowdown: Evidence from the U.S. States
Author:
Mr. Roberto Cardarelli
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Ms. Lusine Lusinyan
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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 116
Language:
English
Publication Date:
28 May 2015
DOI:
https://doi.org/10.5089/9781513520834.001
ISBN:
9781513520834
ISSN:
1018-5941
Pages:
24
Keywords:
WP; TFP growth; Productivity; growth; stochastic frontier analysis; U.S. states; total factor productivity growth; TFP determinant; TFP trend; TFP deceleration; TFP experience; Total factor productivity; Human capital; Technological innovation
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Total factor productivity (TFP) growth began slowing in the United States in the mid-2000s, before the Great Recession. To many, the main culprit is the fading positive impact of the information technology (IT) revolution that took place in the 1990s. But our estimates of TFP growth across the U.S. states reveal that the slowdown in TFP was quite widespread and not particularly stronger in IT-producing states or in those with a relatively more intensive usage of IT. An alternative explanation offered in this paper is that the slowdown in U.S. TFP growth reflects a loss of efficiency or market dynamism over the last two decades. Indeed, there are large differences in production efficiency across U.S. states, with the states having better educational attainment and greater investment in R&D being closer to the production “frontier.”
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2015: Issue 116