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February 13, 2006


Tim Worstall

Much as I like to hammer on El Gordo I think there’s some truth to the last. Much of the US burst of productivity growth seems to be being attributed to US firms having worked it out.

Having negative productivity growth in the public sector isn’t helping though.

Tim Worstall

The other thing I wonder about IT is, is this a one off boost? Will we get a few years of fast growth then see it level off? Or will learning how to use IT properly lead to a permanent boost in the possible level of growth?


1/2 are interesting and probably true. The sort of jobs created in the mid-90s that sucked up a lot of the mass unemployed - call centres, essentially - are hardly productivity-rocking. That's also, in essence, why they are so readily exportable - it's almost economic empty calories.

3 - well, we hope. I wonder to what extent workers wasting time blogging (also known as learning, cooperating and such) is actually beneficial and whether the stats capture that?

angry economist

Is this productivity for all sectors? or just manufacturing?

The reasons for crap productivity performance are many - CEP at LSE do a lot of good papers on this. One of the interesting findings is that in certain industries, there are some very high productivity businesses, followed by long tails of lower productivity ones.

I posted an article on productivity issues and possible policy responses on my blog (see link below comment) a while back.

Interestingly too, there might be of productivity which some may not like - e.g. tesco making productivity gains whilst wiping out local shops and business ownership.

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