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The Procyclical Behavior of Total Factor Productivity in the United States, 1890–2004

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  • Field, Alexander J.

Abstract

Between 1890 and 2004 total factor productivity (TFP) growth in the United States has been strongly procyclical, while labor productivity growth has been mildly so. This article argues that these results are not simply a statistical artifact, as Mathew Shapiro and others have argued. Procyclicality resulted principally from demand shocks interacting with capital services which are relatively invariant over the cycle. This account contrasts with explanations emphasizing labor hoarding as well as those offered by the real business cycle (RBC) program, in which TFP shocks (deviations from trend) are themselves the cause of cycles.

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  • Field, Alexander J., 2010. "The Procyclical Behavior of Total Factor Productivity in the United States, 1890–2004," The Journal of Economic History, Cambridge University Press, vol. 70(2), pages 326-350, June.
    • Handle: RePEc:cup:jechis:v:70:y:2010:i:02:p:326-350_00
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    Cited by:

    1. Jan P. A. M. Jacobs & Simon van Norden, 2010. "Lessons from the latest data on U.S. productivity," Working Papers 11-1, Federal Reserve Bank of Philadelphia.
    2. Ahn, JaeBin & Choi, Moon Jung, 2020. "From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data," Japan and the World Economy, Elsevier, vol. 56(C).
    3. Lise Clain-Chamosset-Yvrard & Xavier Raurich & Thomas Seegmuller, 2024. "Entrepreneurship, growth and productivity with bubbles," Post-Print hal-04718292, HAL.
    4. Rüth, Sebastian & Mayer, Eric & Scharler, Johann, 2014. "TFP and the Transmission of Shocks," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100549, Verein für Socialpolitik / German Economic Association.
    5. Gottfries, Nils & Mickelsson, Glenn & Stadin, Karolina, 2018. "Deep Dynamics," Working Paper Series 2018:10, Uppsala University, Department of Economics.
    6. Jiang, Dou & Weder, Mark, 2021. "American business cycles 1889–1913: An accounting approach," Journal of Macroeconomics, Elsevier, vol. 67(C).
    7. Bianca Barbaro & Giorgio Massari & Patrizio Tirelli, 2022. "Who killed business dynamism in the U.S.?," Working Papers 494, University of Milano-Bicocca, Department of Economics, revised Aug 2022.
    8. Clain-Chamosset-Yvrard, Lise & Raurich, Xavier & Seegmuller, Thomas, 2024. "Entrepreneurship, growth and productivity with bubbles," Journal of Macroeconomics, Elsevier, vol. 81(C).
    9. Jacobs, Jan P.A.M. & van Norden, Simon, 2016. "Why are initial estimates of productivity growth so unreliable?," Journal of Macroeconomics, Elsevier, vol. 47(PB), pages 200-213.
    10. Nils Gottfries & Glenn Mickelsson & Karolina Stadin, 2021. "Deep Dynamics," CESifo Working Paper Series 8873, CESifo.
    11. Herman De Jong & Pieter Woltjer, 2011. "Depression dynamics: a new estimate of the Anglo‐American manufacturing productivity gap in the interwar period," Economic History Review, Economic History Society, vol. 64(2), pages 472-492, May.
    12. Godfrey Madigu & Luis A. Gil‐Alana, 2021. "What do productivity indices tell us? A case study of U.S. industries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 4946-4978, October.
    13. Alexander J. Field, 2011. "The Adversity/Hysteresis Effect: Depression-Era Productivity Growth in the U.S. Railroad Sector," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 579-606, National Bureau of Economic Research, Inc.
    14. Iván Kataryniuk & Jaime Martínez-Martín, 2019. "TFP Growth and Commodity Prices in Emerging Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(10), pages 2211-2229, August.

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