Should-Read: Barry Eichengreen, Donghyun Park, and Kwanho Shin: The Global Productivity Slump:  Common and Country-Specific Factors

Should-Read: But is this—global—productivity slump really like any of the previous—much more local—productivity slumps? A very promising intellectual exercise to do in prospect, but I am going to find Barry and ask him what we really learn from it: Barry Eichengreen, Donghyun Park, and Kwanho Shin: The Global Productivity Slump:  Common and Country-Specific Factors: “Productivity growth is slowing around the world…

…In 2015, the growth of total factor productivity (TFP) hovered around zero for the fourth straight year, down from 1 percent in 1996–2006 and 0.5 percent 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 and unusually high investment rates are among the significant country-specific correlates of TFP slumps, and energy-price shocks are among the significant global factors…

Barry Eichengreen: I remain a techno-optimist. I see no evidence that the progress
of science and technology is slowing down. What I see is the need to further reorganize how enterprises interact with their customers and organize their workforce to better exploit the productivity-enhancing potential of new technologies. My own favorite example is electronic medical records. At the moment, with the transition from handwritten charts and transcriptions, doctors are being forced to grapple with unfamiliar software and awkward laptops, and to re-input old information along with new. Different electronic recordkeeping systems are incompatible, and it remains impossible to transmit information across platforms. New technology is therefore a drag on productivity rather than a boost. With more time to adjust and more work on systems compatibility, we can be confident that this will change. We just can’t say when.