Comments on Robert Gordon and Joel Mokyr “The long-term future of productivity? The state of the debate”, Jonathan Haskel
Comments on Robert Gordon and Joel Mokyr “The long-term future of productivity? The state of the debate”
Imperial College Business School, CEPR, IZA
Joint OECD-NBER Conference on Productivity Growth and Innovation in the Long Run, OECD Paris, 25-26 September 2014
Productivity growth: a case study
•How to think about productivity growth in this process
–Measurement: four wheels are changed, but have to adjust for quality (here, speed). Lessons for ICT, including C (Corrado, 2011), service sector productivity
–Capital deepening: not just the compressed air spanners, but also ICT
–Labour quality: education of the team
–TFP/knowledge/intangible capital deepening: Teamwork
•How to think about productivity growth in this industry
–Highly capital intensive (tangible and intangible), complementary to ICT via TV rights.
–Car racing tastes crosses cultural boundaries
–Globalisation & cheap communications => scale => increased earnings for scarce factors (drivers, owners of rights) => inequality Haskel, Lawrence, Leamer, Slaughter (2013)
•Productivity in other industries
–Spillovers into health
•So: three elements to RJG story
–So output per person can be slowed by slowdown in
•productivity (labour quality, capital deepening, technical change)
•Lab force participation (women, part-time work, sickness, discouraged workers)
–and then consumption depends on incomes net of debt repayments, which in turn depends upon
•inequality => might be no income rise for most of population, and a no rise in consumption
•Debt => less scope for consumption
•The three elements
–Labour force participation
–Inequality/debt productivitylabour force participation, working hoursoutput output hours worked personhour workedperson
•Can we see some of Bob’s concerns in this 1950s picture? The US economy in 1950
–Labour force participation
•Low unemployment/discouraged worker, female participation
•Income inequality and debt would be less: so consumption would grow
•Young workforce with high participation
•Labour quality to improve: graduation from high school/ college?
•ICT revolution to come
•RJG US slowdown is from 2%pa to 0.5%pa.
–Due to debt/inequality = 0.7%pa
–Due to labour quality & demography= 0.2%pa and 0.3%pa
–Due to technical change (includes post 72 slowdown =0.6%)
–Applies to other countries?
–Scope for other countries to catch up to US
•Labour quality slowing
–Long term unemployed/discouraged workers: scope for policy?
–Quality of education/graduation rates
•Scope for policy: Fryer/Angrist/Lavy on incentives?
•Long-term technical progress
–Has the ICT revolution played out?
•schools and higher education?
•Is Moore’s law slowing? Byrne, Oliner, Sichel, 2014
•Gains in ICT as capital deepening/TFP in the discovery process
•Syverson , 2013
–Is the IP system fit for purpose?
Is the price decline of microprocessors slowing?
Source: Byrne, Oliner, Sichel, 2014
General purpose technologies and productivity
Source: Syverson , 2013
Source: WSJ, June 2014, Economists Debate and RJG