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Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown

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  • Daron Acemoglu
  • David Autor
  • Christina Patterson

Abstract

Despite the rapid pace of innovation in information and communications technologies (ICT) and electronics, aggregate US productivity growth has been disappointing since the 1970s. We propose and empirically explore the hypothesis that slow growth stems in part from an unbalanced sectoral distribution of innovation over the last several decades. Because an industry's success in innovation depends on complementary innovations among its input suppliers, rapid productivity growth that is concentrated in a subset of sectors may create bottlenecks and consequently fail to translate into commensurate aggregate productivity gains. Using data on input-output linkages, citation linkages, industry productivity growth and patenting, we find evidence consistent with this hypothesis: the variance of suppliers' Total Factor Productivity growth or innovation adversely affects an industry's own TFP growth and innovation. Our estimates suggest that a substantial share of the productivity slowdown in the United States (and several other industrialized economies) can be accounted for by a sizable increase in cross-industry variance of TFP growth and innovation. For example, if TFP growth variance had remained at the 1977-1987 level, US manufacturing productivity would have grown twice as rapidly in 1997-2007 as it did—yielding a counterfactual growth rate that would have been close to that of 1977-1987 and 1987-1997.
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Suggested Citation

  • Daron Acemoglu & David Autor & Christina Patterson, 2024. "Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown," NBER Macroeconomics Annual, University of Chicago Press, vol. 38(1), pages 153-207.
  • Handle: RePEc:ucp:macann:doi:10.1086/729196
    DOI: 10.1086/729196
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    Cited by:

    1. Olivier CARDI & Romain RESTOUT, 2023. "Why Hours Worked Decline Less After Technology Shocks?," Working Papers of BETA 2023-30, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Jesús Fernández-Villaverde & Yang Yu & Francesco Zanetti, 2024. "Technological Synergies, Heterogeneous Firms, and Idiosyncratic Volatility," NBER Working Papers 32247, National Bureau of Economic Research, Inc.
    3. Maya M. Durvasula & Sabri Eyuboglu & David M. Ritzwoller, 2024. "Counting Clinical Trials: New Evidence on Pharmaceutical Sector Productivity," Papers 2405.08030, arXiv.org, revised Jan 2025.
    4. Roudy Sassine, 2024. "Assessing sectoral capacity for wage increase: a multidimensional analysis using CPS ASEC data," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 59(4), pages 243-257, October.
    5. Falck, Elisabeth & Röhe, Oke & Strobel, Johannes, 2024. "Digital transformation and its impact on labour productivity: A multi-sector perspective," Discussion Papers 28/2024, Deutsche Bundesbank.
    6. Christian Chacua & Shreyas Gadgin Matha & Matte Hartog & Ricardo Hausmann & Muhammed A. Yildirim, 2024. "Innovation Policies Under Economic Complexity," Growth Lab Working Papers 234, Harvard's Growth Lab.

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    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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