Whatever Happened to Productivity Growth?

Abstract

In this paper we present international comparisons of patterns of economic growth among the G7 countries over the period 1960 -95.Between 1960 and 1973 productivity growth accounted for more than half of growth in output per capita for France, Germany, Italy, Japan, and the United Kingdom and somewhat less than half of output growth in Canada and the United States.The relative importance of productivity declined substantially after 1973, accounting for a predominant share of growth between 1973 and 1989 only for France.Since 1989 productivity growth has almost disappeared as a source of economic growth in the G7 countries.Between 1989 and 1995 productivity growth was negative for five of the G7 countries, with positive growth only for Japan and the United States.The level of productivity for Canada in 1995 fell almost to the level first achieved in 1973, and declines in Italy and the United Kingdom brought productivity down to the levels of 1974 and 1978, respectively.Since 1989 input per capita has grown more slowly than the average for the period 1960-89, except for Germany.The United States has retained its lead in output per capita throughout the period 1960-95.The United States has also led the G7 countries in input per capita, while relinquishing its lead in productivity to France.