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The productivity slowdown: is it the ‘new normal’?

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  • Nicholas Crafts

Abstract

This paper considers the paradoxical co-existence of a productivity slowdown and exciting new technologies. Several potential explanations are reviewed. It is argued that while some are unpersuasive it is too soon to know which carry the most weight. However, the slowdown does not appear to be an artefact of the data. A key, hotly disputed, issue is the future economic impact of today’s technological progress. As with previous general purpose technologies, it is likely that there will be powerful effects but only with a lag. This has the implication that while the slowdown is real it is not necessarily permanent.

Suggested Citation

  • Nicholas Crafts, 2018. "The productivity slowdown: is it the ‘new normal’?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 34(3), pages 443-460.
    • Handle: RePEc:oup:oxford:v:34:y:2018:i:3:p:443-460.
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    File URL: http://hdl.handle.net/10.1093/oxrep/gry001
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    Cited by:

    1. N. Cordemans, 2018. "Low productivity growth," Economic Review, National Bank of Belgium, issue iv, pages 67-80, december.
    2. Carlo Ciccarelli & Matteo Gomellini & Paolo Sestito, 2019. "Demography and Productivity in the Italian Manufacturing Industry: Yesterday and Today," CEIS Research Paper 457, Tor Vergata University, CEIS, revised 16 May 2019.
    3. Ian Goldin & Pantelis Koutroumpis & François Lafond & Julian Winkler, 2024. "Why Is Productivity Slowing Down?," Journal of Economic Literature, American Economic Association, vol. 62(1), pages 196-268, March.
    4. Nicholas Crafts, 2021. "The Sources Of British Economic Growth Since The Industrial Revolution: Not The Same Old Story," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 697-709, July.
    5. Jacques Bughin & Nicolas van Zeebroeck, 2021. "The Entrepreneurial Returns to Incumbents’ Digital Transformation," Working Papers TIMES² 2021-048, ULB -- Universite Libre de Bruxelles.
    6. Zabala-Iturriagagoitia, Jon Mikel & Aparicio, Juan & Ortiz, Lidia & Carayannis, Elias G. & Grigoroudis, Evangelos, 2021. "The productivity of national innovation systems in Europe: Catching up or falling behind?," Technovation, Elsevier, vol. 102(C).
    7. Arun Advani & George Bangham & Jack Leslie, 2021. "The UK's wealth distribution and characteristics of high‐wealth households," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 397-430, September.
    8. van Ark, Bart & de Vries, Klaas & Erumban, Abdul, 2021. "How To Not Miss A Productivity Revival Once Again," National Institute Economic Review, National Institute of Economic and Social Research, vol. 255, pages 9-24, February.
    9. Irina Kosorukova & Alexander Voronov & Ekaterina Mirgorod & Svetlana Lupacheva & Olga Trubetskaya, 2023. "BRICS Countries in a Period of Uncertainty and Turbulence: Opportunities for the Formation of a New Configuration of the Global Economy," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 51-76.
    10. Crafts, Nicholas & Mills, Terence C., 2020. "Is The Uk Productivity Slowdown Unprecedented?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 251, pages 47-53, February.
    11. Edquist, Charles & Zabala-Iturriagagoitia, Jon Mikel, 2020. "Functional procurement for innovation, welfare and the environment," Papers in Innovation Studies 2020/1, Lund University, CIRCLE - Centre for Innovation Research, revised 19 Jul 2020.
    12. Viete, Steffen & Erdsiek, Daniel, 2020. "Mobile Information Technologies and Firm Performance: The Role of Employee Autonomy," Information Economics and Policy, Elsevier, vol. 51(C).
    13. Sheng Dai & Timo Kuosmanen & Zhiqiang Liao, 2024. "Economic growth of cities: Does resource allocation matter?," Papers 2410.04918, arXiv.org.
    14. Nigel Driffield & Jun Du & Jan Godsell & Mark Hart & Katiuscia Lavoratori & Steven Roper & Irina Surdu & Wanrong Zhang, 2021. "Understanding productivity:Organisational Capital perspectives," Working Papers 013, The Productivity Institute.
    15. Kovalenko, Tim & Töpfer, Marina, 2021. "Cyclical dynamics and the gender pay gap: A structural VAR approach," Economic Modelling, Elsevier, vol. 99(C).
    16. Bart van Ark & Anthony J. Venables, 2020. "A Concerted Effort to Tackle the UK Productivity Puzzle," International Productivity Monitor, Centre for the Study of Living Standards, vol. 39, pages 3-15, Fall.
    17. Niebel, Thomas, 2019. "Wachstumsperspektiven der digitalen Transformation: Wird der ökonomische Mehrwert der Digitalisierung in der Volkswirtschaftlichen Gesamtrechnung angemessen abgebildet?," Working Paper Forschungsförderung 142, Hans-Böckler-Stiftung, Düsseldorf.
    18. Nieto-Carrillo, Ernesto & Carreira, Carlos & Teixeira, Paulino, 2024. "Industrial dynamics in the ICT technological paradigm: The case of Portugal, 1986–2018," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 155-170.
    19. Fiedler, Salomon & Gern, Klaus-Jürgen & Jannsen, Nils & Wolters, Maik H., 2019. "Growth prospects, the natural interest rate, and monetary policy," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-34.
    20. Parteka, Aleksandra & Kordalska, Aleksandra, 2023. "Artificial intelligence and productivity: global evidence from AI patent and bibliometric data," Technovation, Elsevier, vol. 125(C).
    21. Jacques Bughin & Nicolas van Zeebroeck, 2024. "Strategic Renewal and Corporate Return of Digital Transformation," Working Papers TIMES² 2024-071, ULB -- Universite Libre de Bruxelles.
    22. Bart van Ark & Venables, 2021. "A concerted effort to tackle the productivity puzzle during the post-COVID era," Working Papers 001, The Productivity Institute.
    23. Barbero, Javier & Zabala-Iturriagagoitia, Jon Mikel & Zofío, José L., 2021. "Is more always better? On the relevance of decreasing returns to scale on innovation," Technovation, Elsevier, vol. 107(C).

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