Syverson On The Productivity Slowdown

Chad Syverson has an interesting novel newspaper on the sources of the productivity slowdown.

Background to wake y'all up: Long-term U.S. increase is slowing down. This is a (the!) big of import number inwards economic science (one previous post).  And productivity -- how much each individual tin arrive at per hr -- is the solely root of long-term growth. We are non vastly ameliorate off than our grandparents because nosotros negotiated ameliorate reward for hacking at coal amongst pickaxes.

Why is productivity slowing down? Perhaps we've run out of ideas (Gordon). Perhaps a savings glut too the  zero leap drive secular stagnation lack of require (Summers). Perhaps the out of command regulatory leviathan is killing increase amongst a one one thousand cuts (Cochrane).

Or maybe productivity  isn't declining at all, we're merely measuring novel products badly (Varian; Silicon Valley). Google maps is free! If so, nosotros are living amongst undiagnosed but good for y'all deflation, too existent gross domestic product increase is truly doing well.

Chad:

First, the productivity slowdown has occurred inwards dozens of countries, too its size is unrelated to measures of the countries’ consumption or production intensities of information too communication technologies ... Second, estimates... of the surplus created past times internet-linked digital technologies autumn far curt of the $2.7 trillion or to a greater extent than of “missing output” resulting from the productivity increase slowdown...Third, if mensuration problems were to concern human relationship for fifty-fifty a small-scale part of this missing output, the properly measured output too productivity increase rates of industries that arrive at too service ICTs [internet] would accept to accept been multiples of their measured increase inwards the data. Fourth, acre measured gross domestic income has been on average higher than measured gross domestic production since 2004—perhaps indicating workers are beingness paid to brand products that are given away for gratis or at highly discounted prices—this tendency truly began earlier the productivity slowdown too moreover reflects unusually high uppercase income rather than undertaking income (i.e., profits are unusually high). In combination, these complementary facets of bear witness propose that the reasonable prima facie illustration for the mismeasurement hypothesis faces existent hurdles when confronted amongst the data.

An interesting read throughout. 

[Except for that final sentence, a about parody of academic caution!]