SlideShare ist ein Scribd-Unternehmen logo
1 von 21
Downloaden Sie, um offline zu lesen
Productivity Dynamics over the
Medium Term
Diego Comin
Dartmouth College
Factsabout
Productivityand
Inflation
 Slowdown in Productivity Growth, since 2005 or so until
recently
 Where TFP growth seems to have started to grow at (or
slightly above) pre-GR growth rate
 Slowdown in TFP concentrated in followers
 Wide-spread across countries
 Inflation was higher than expected during and after GR
 But lower than expected once short-run output
converged
-0.06
-0.05
-0.04
-0.03
-0.02
-0.01
0
0.01
0.02
0.03
1987 1991 1995 1999 2003 2007 2011 2015
Detrended TFP
0
0.5
1
1.5
2
2.5
3
2001 2004 2007 2010 2013 2016 2019
inflation Predicted Inflation
Goals
 Present a simple model that accounts for these
patterns
 Importantly, model was developed to study productivity
growth during the GR
 Accounts for productivity growth before GR, and recent
recovery
 Also accounts for evolution of inflation during and after
GR and during recent recovery
 Key mechanism: Cyclical response to technology
adoption to discount rate shocks
 Provide evidence on the mechanism
 A historical account of productivity dynamics and
inflation over the medium term
Model
1. 𝑦𝑦𝑡𝑡 = 𝑦𝑦𝑡𝑡
𝑝𝑝
+ 𝑦𝑦𝑡𝑡
𝑠𝑠
2. 𝑦𝑦𝑡𝑡
𝑠𝑠
= �𝛼𝛼χχ𝑡𝑡 + �𝛼𝛼𝑅𝑅 𝑅𝑅𝑡𝑡
3. ∆𝑦𝑦𝑡𝑡
𝑝𝑝
= ̅𝜌𝜌∆𝑎𝑎𝑡𝑡
4. ∆𝑎𝑎𝑡𝑡 = ̅𝜈𝜈𝜆𝜆 𝜆𝜆𝑡𝑡−1 + ̅𝜈𝜈 𝑧𝑧𝑡𝑡−1 − 𝑎𝑎𝑡𝑡−1
5. 𝜆𝜆𝑡𝑡 = ̅𝛾𝛾𝑦𝑦 𝑦𝑦𝑡𝑡
𝑠𝑠
− ̅𝛾𝛾𝑅𝑅 𝑅𝑅𝑡𝑡
6. ∆�𝜋𝜋𝑡𝑡 = ̅𝜅𝜅𝑚𝑚𝑚𝑚𝑡𝑡 + 𝜀𝜀𝑡𝑡
7. 𝑚𝑚𝑚𝑚𝑡𝑡 = − ̅𝜂𝜂𝑎𝑎 𝑎𝑎𝑡𝑡 + ̅𝜂𝜂𝑦𝑦 𝑦𝑦𝑡𝑡
𝑠𝑠
8. ∆𝑧𝑧𝑡𝑡+1 = χ𝑡𝑡 + ̅𝜃𝜃𝑠𝑠𝑡𝑡
Evidence
Cyclicality of Adoption
Figure 2: R&D Expenditures by US Corporations, 1983-2013
1984 1987 1990 1993 1995 1998 2001 2004 2006 2009 2012
-0.15
-0.1
-0.05
0
0.05
0.1
R&D Expenditure by US Corporations
Log-linearly detrended data. Source: R&D Expenditure by US corporations (National Science Foundation).
Data are deflated by the GDP deflator and divided by the civilian population older than 16 (see Appendix
A.1 for data sources).
6
Cyclical Adoption: A Shred of Evidence
Survey data: sample of 26 production technologies that di¤used at various times
over the period 1947-2003 in the US (5) and the UK (21).
mit fraction of potential adopters that have adopted technology i at time t
– ! ratio of adopters to non-adopters rit = mit=(1 mit)
– ! speed of di¤usion Speedit = 4 ln(rit)
Econometric speci…cation
Speedit = i + 1lagit + 2(lagit)2 + byt + it;
lagit time from introduction of technology i
byt detrended output
3
Table 1: Cyclicality of the Speed of Technology Diffusion
I II III IV
yt 3.73 3.7 3.64 4.12
(3.59) (2.81) (3.94) (3.17)
yt * US 0.07 -0.74
(0.04) (0.53)
lagit -0.057 -0.057
(5.22) (4.76)
lag2
it 0.001 0.001
(2.52) (2.12)
ln(lagit) -0.29 -0.29
(6.68) (6.65)
R2 (within) 0.11 0.11 0.13 0.13
N technologies 26 26 26 26
N observations 327 327 327 327
Notes: (1) dependent variable is the speed of diffusion of 26 technologies, (2) all regressions include technology
specific fixed effects. (3) t-statistics in parenthesis, (4) yt denotes the cycle of GDP per capita in the country
and represents the high and medium term components of output fluctuations, (5)yt*US is the medium term
cycle of GDP per capita times a US dummy, (6) lag represents the years since the technology first started
to diffuse.
speed of diffusion and the cycle. Diffusion speed was lowest in the deep 1981-82 recession;
it recovered during the 80s and declined again after the 1990 recession. It increased notably
during the expansion in the second half of the 90s and declined again with the 2001 recession.
Next, we turn our attention to study the evolution of the speed of technology diffu-
sion during the Great Recession. Due to its recent nature, the evidence we have is more
anecdotal. Eurostat provides information on the diffusion of three relevant internet-related
technologies in the UK.6 Figure 4 plots their average diffusion from 2004 until 2013 with
the business cycle downturns in the UK. The figure confirms the pro-cyclicality of the speed
of diffusion of these technologies. In particular, during the downturn corresponding to the
Great Recession (2008-2009), the average speed of diffusion of our three technologies sharply
declined by 75%. After the Great Recession, the speed of diffusion recovered and converged
6
The measures we consider are the fraction of firms that (i) have access to broadband internet, that
(ii) actively purchase online products and services and that (iii) actively sell online products and services
(actively is defined as constituting at least 1% of sales/purchases). For each of these three measures we
construct the speed of technology diffusion using expression (2), and then filter the effect of the lag since
the introduction of the technology using expression (3) and the estimates from column 3 of Table 1. The
resulting series are demeaned so that they can be interpreted as percent deviations from the average speed
of technology diffusion.
8
Figure 3: Speed of Diffusion
1980 1985 1990 1995 2000 2005
−0.3
−0.25
−0.2
−0.15
−0.1
−0.05
0
0.05
0.1
0.15
0.2
Avg. diffusion
Avg. diffusion (3 year MA)
to approximately 8% below average. Beyond its cyclicality, the second observation we want
to stress from the Figure is that fluctuations in the speed of diffusion are very wide, ranging
from 86% above average in 2004 to 74% below the average diffusion speed in 2009.
Finally, Andrews et al. (2015) have recently provided complementary evidence that tech-
nology diffusion in OECD countries may have slowed during the Great Recession. In their
study, they show that the gap in productivity between the most productive firms in a sector
(leaders) and the rest (followers) has increased significantly during the Great Recession.7
Andrews et al. (2015) show that the most productive firms have much greater stocks of
patents which suggests that they engage in more R&D activity. They interpret the increase
in the productivity gap as evidence that followers have slowed down the rate at which they
incorporate frontier technologies developed by the leaders.
These co-movement patterns between the business cycle and measures of investments in
technology development as well as measures of the rate of technology adoption is, in our
view, sufficiently suggestive evidence to motivate the quantitative exploration we conduct
through the lens of our model.
7
In manufacturing the productivity gap increased by 12% from 2007 and 2009, and in services by ap-
proximately 20%.
9
Figure 4: Diffusion Speed for 3 Internet Technologies in the UK, 2004-2013
2004 2005 2006 2008 2009 2010 2012
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
Diffusion Speed for 3 Internet Technologies in UK
Source: Eurostat; see footnote 6 for details of calculations. Shaded areas are UK recession dates as dated by
UK ONS.
10
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Adoption Outputs in Germany
% sales from company improvements in products Unit cost reductions (right axis)
0
0.01
0.02
0.03
0.04
0.05
0.06
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Adoption Costs in Germany
Adoption costs
Historical Account
Q3-87 Q1-93 Q3-98 Q1-04 Q3-09 Q1-15
-6
-4
-2
0
2
4
6
8
TFP
Endogenous Component of TFP
Labor Productivity
Q1-85 Q1-90 Q1-95 Q1-00 Q1-05 Q1-10 Q1-15
-15
0
15
2
5
8
A
Z
(right axis)
TakeAwayTFP
 Slowdown in TFP largely due to endogenous component
 During GR and post-GR: liquidity demand slows down
adoption rate
 Prior to GR: R&D productivity declines in 2001, and this
leads to lower TFP growth from 2005-2008
 In recent times: adoption rate stabilized, and TFP grows
at pre-GR rate due to catch up
 Heterogeneity in adoption between leaders and
followers could explain TFP divergence
Q1-10 Q1-12 Q1-14 Q1-16 Q1-18
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
Baseline Model (Data)
Exogenous TFP Model
Q1-10 Q1-12 Q1-14 Q1-16 Q1-18
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Baseline Model (Data)
TakeAway
inflation
 Higher than expected inflation during and after GR, due
to lower level of endogenous TFP
 (Due to TFP convergence) this effect has disappeared
and now endogenous TFP leads to lower than expected
inflation

Weitere ähnliche Inhalte

Was ist angesagt?

Changing Patterns of Market Power and Contestability
Changing Patterns of Market Power and ContestabilityChanging Patterns of Market Power and Contestability
Changing Patterns of Market Power and ContestabilityStructuralpolicyanalysis
 
The digital transformation: Measurement and implications for competition and ...
The digital transformation: Measurement and implications for competition and ...The digital transformation: Measurement and implications for competition and ...
The digital transformation: Measurement and implications for competition and ...Structuralpolicyanalysis
 
The Productivity Paradox of the New Digital Economy
The Productivity Paradox of the New Digital EconomyThe Productivity Paradox of the New Digital Economy
The Productivity Paradox of the New Digital EconomyStructuralpolicyanalysis
 
Productivity effects of knowledge-based capital – New evidence from German fi...
Productivity effects of knowledge-based capital – New evidence from German fi...Productivity effects of knowledge-based capital – New evidence from German fi...
Productivity effects of knowledge-based capital – New evidence from German fi...Structuralpolicyanalysis
 
The Human Side of Productivity Setting the Scene
The Human Side of Productivity Setting the SceneThe Human Side of Productivity Setting the Scene
The Human Side of Productivity Setting the SceneStructuralpolicyanalysis
 
The Productivity Paradox
The Productivity ParadoxThe Productivity Paradox
The Productivity ParadoxBluecrux
 
Driving Productivity Growth: The Importance of Firm-Specific Knowledge Assets
Driving Productivity Growth: The Importance of Firm-Specific Knowledge AssetsDriving Productivity Growth: The Importance of Firm-Specific Knowledge Assets
Driving Productivity Growth: The Importance of Firm-Specific Knowledge AssetsStructuralpolicyanalysis
 
The Effects of Management on Productivity: Evidence from Mid-20th Century
The Effects of Management on Productivity: Evidence from Mid-20th CenturyThe Effects of Management on Productivity: Evidence from Mid-20th Century
The Effects of Management on Productivity: Evidence from Mid-20th CenturyStructuralpolicyanalysis
 
Using firm-level micro data for evidence based policy making
Using firm-level micro data for evidence based policy makingUsing firm-level micro data for evidence based policy making
Using firm-level micro data for evidence based policy makingStructuralpolicyanalysis
 
UK productivity: challenging every business to improve
UK productivity: challenging every business to improveUK productivity: challenging every business to improve
UK productivity: challenging every business to improveStructuralpolicyanalysis
 
Icdec2020_presentation_slides_26
Icdec2020_presentation_slides_26Icdec2020_presentation_slides_26
Icdec2020_presentation_slides_26ICDEcCnferenece
 

Was ist angesagt? (20)

Changing Patterns of Market Power and Contestability
Changing Patterns of Market Power and ContestabilityChanging Patterns of Market Power and Contestability
Changing Patterns of Market Power and Contestability
 
The digital transformation: Measurement and implications for competition and ...
The digital transformation: Measurement and implications for competition and ...The digital transformation: Measurement and implications for competition and ...
The digital transformation: Measurement and implications for competition and ...
 
Kevin Fox
Kevin FoxKevin Fox
Kevin Fox
 
Christina Timiliotis
Christina TimiliotisChristina Timiliotis
Christina Timiliotis
 
Keynote Bartelsman
Keynote BartelsmanKeynote Bartelsman
Keynote Bartelsman
 
The Productivity Paradox of the New Digital Economy
The Productivity Paradox of the New Digital EconomyThe Productivity Paradox of the New Digital Economy
The Productivity Paradox of the New Digital Economy
 
Productivity effects of knowledge-based capital – New evidence from German fi...
Productivity effects of knowledge-based capital – New evidence from German fi...Productivity effects of knowledge-based capital – New evidence from German fi...
Productivity effects of knowledge-based capital – New evidence from German fi...
 
The Human Side of Productivity Setting the Scene
The Human Side of Productivity Setting the SceneThe Human Side of Productivity Setting the Scene
The Human Side of Productivity Setting the Scene
 
The Productivity Paradox
The Productivity ParadoxThe Productivity Paradox
The Productivity Paradox
 
Driving Productivity Growth: The Importance of Firm-Specific Knowledge Assets
Driving Productivity Growth: The Importance of Firm-Specific Knowledge AssetsDriving Productivity Growth: The Importance of Firm-Specific Knowledge Assets
Driving Productivity Growth: The Importance of Firm-Specific Knowledge Assets
 
The Effects of Management on Productivity: Evidence from Mid-20th Century
The Effects of Management on Productivity: Evidence from Mid-20th CenturyThe Effects of Management on Productivity: Evidence from Mid-20th Century
The Effects of Management on Productivity: Evidence from Mid-20th Century
 
Using firm-level micro data for evidence based policy making
Using firm-level micro data for evidence based policy makingUsing firm-level micro data for evidence based policy making
Using firm-level micro data for evidence based policy making
 
Session 1 A Ryan Decker
Session 1 A   Ryan DeckerSession 1 A   Ryan Decker
Session 1 A Ryan Decker
 
Jonathan Coppel
Jonathan CoppelJonathan Coppel
Jonathan Coppel
 
UK productivity: challenging every business to improve
UK productivity: challenging every business to improveUK productivity: challenging every business to improve
UK productivity: challenging every business to improve
 
Dan Andrews
Dan AndrewsDan Andrews
Dan Andrews
 
Carol Corrado
Carol CorradoCarol Corrado
Carol Corrado
 
Antonin Bergeaud
Antonin BergeaudAntonin Bergeaud
Antonin Bergeaud
 
Icdec2020_presentation_slides_26
Icdec2020_presentation_slides_26Icdec2020_presentation_slides_26
Icdec2020_presentation_slides_26
 
Measuring GDP in a digitalised economy
 Measuring GDP in a digitalised economy Measuring GDP in a digitalised economy
Measuring GDP in a digitalised economy
 

Ähnlich wie Productivity Dynamics and Inflation over the Medium Term

DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATE
DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATEDWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATE
DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATEIDATE DigiWorld
 
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 20122014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012OECD_NAEC
 
americansdoitbetterslides-1223620501491852-9.ppt
americansdoitbetterslides-1223620501491852-9.pptamericansdoitbetterslides-1223620501491852-9.ppt
americansdoitbetterslides-1223620501491852-9.pptAjay Gangakhedkar
 
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...Soledad Zignago
 
IRJET- Impact of Information Technology on Construction Industry
IRJET- Impact of Information Technology on Construction IndustryIRJET- Impact of Information Technology on Construction Industry
IRJET- Impact of Information Technology on Construction IndustryIRJET Journal
 
Americans Do It Better Slides
Americans Do It Better SlidesAmericans Do It Better Slides
Americans Do It Better SlidesFNian
 
Americans Do It Better Slides
Americans Do It Better SlidesAmericans Do It Better Slides
Americans Do It Better SlidesFNian
 
Dosi - The persistence of growth of large corporations
Dosi - The persistence of growth of large corporationsDosi - The persistence of growth of large corporations
Dosi - The persistence of growth of large corporationsinnovationoecd
 
Meeting with Investors - November 2014
Meeting with Investors - November 2014Meeting with Investors - November 2014
Meeting with Investors - November 2014TIM RI
 
On the contribution of information and communicationtechnolo.docx
On the contribution of information and communicationtechnolo.docxOn the contribution of information and communicationtechnolo.docx
On the contribution of information and communicationtechnolo.docxcherishwinsland
 
International Communications Market 2008
International Communications Market 2008International Communications Market 2008
International Communications Market 2008comment.ofcom
 
ACGMslides2015November
ACGMslides2015NovemberACGMslides2015November
ACGMslides2015Novemberdcomin1
 
Automation Process in Emerging World and its importance
Automation Process in Emerging World and its importanceAutomation Process in Emerging World and its importance
Automation Process in Emerging World and its importanceSubmissionResearchpa
 
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...Chiara Criscuolo, How to reach the productvity benefits from the digital tran...
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...Istituto nazionale di statistica
 
O1_Analysis KETs_DEF
O1_Analysis KETs_DEFO1_Analysis KETs_DEF
O1_Analysis KETs_DEFa b
 
Productivity Mgs In Spain Acede05 Tenerife
Productivity Mgs In Spain Acede05 TenerifeProductivity Mgs In Spain Acede05 Tenerife
Productivity Mgs In Spain Acede05 TenerifeLuis Carlos
 
Fiscal Priorities for Long-Run Growth
Fiscal Priorities for Long-Run GrowthFiscal Priorities for Long-Run Growth
Fiscal Priorities for Long-Run GrowthDaragh McCarthy
 

Ähnlich wie Productivity Dynamics and Inflation over the Medium Term (20)

DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATE
DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATEDWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATE
DWS15 - Future Digital Economy Forum - Which role for ICTs - Yves Gassot - IDATE
 
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 20122014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012
2014.02.11 - NAEC Invitation_Productivity trends from 1890 to 2012
 
Killion_WEOC_Boston 2009
Killion_WEOC_Boston 2009Killion_WEOC_Boston 2009
Killion_WEOC_Boston 2009
 
americansdoitbetterslides-1223620501491852-9.ppt
americansdoitbetterslides-1223620501491852-9.pptamericansdoitbetterslides-1223620501491852-9.ppt
americansdoitbetterslides-1223620501491852-9.ppt
 
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...
Productivity and GDP per capita growth: A long-term perspective, Bergeaud, Ce...
 
IRJET- Impact of Information Technology on Construction Industry
IRJET- Impact of Information Technology on Construction IndustryIRJET- Impact of Information Technology on Construction Industry
IRJET- Impact of Information Technology on Construction Industry
 
Americans Do It Better Slides
Americans Do It Better SlidesAmericans Do It Better Slides
Americans Do It Better Slides
 
Americans Do It Better Slides
Americans Do It Better SlidesAmericans Do It Better Slides
Americans Do It Better Slides
 
Dosi - The persistence of growth of large corporations
Dosi - The persistence of growth of large corporationsDosi - The persistence of growth of large corporations
Dosi - The persistence of growth of large corporations
 
Meeting with Investors - November 2014
Meeting with Investors - November 2014Meeting with Investors - November 2014
Meeting with Investors - November 2014
 
On the contribution of information and communicationtechnolo.docx
On the contribution of information and communicationtechnolo.docxOn the contribution of information and communicationtechnolo.docx
On the contribution of information and communicationtechnolo.docx
 
International Communications Market 2008
International Communications Market 2008International Communications Market 2008
International Communications Market 2008
 
ACGMslides2015November
ACGMslides2015NovemberACGMslides2015November
ACGMslides2015November
 
Automation Process in Emerging World and its importance
Automation Process in Emerging World and its importanceAutomation Process in Emerging World and its importance
Automation Process in Emerging World and its importance
 
Geep assignment
Geep assignmentGeep assignment
Geep assignment
 
NS Manufacturing Supplement Oct 2015
NS Manufacturing Supplement Oct 2015NS Manufacturing Supplement Oct 2015
NS Manufacturing Supplement Oct 2015
 
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...Chiara Criscuolo, How to reach the productvity benefits from the digital tran...
Chiara Criscuolo, How to reach the productvity benefits from the digital tran...
 
O1_Analysis KETs_DEF
O1_Analysis KETs_DEFO1_Analysis KETs_DEF
O1_Analysis KETs_DEF
 
Productivity Mgs In Spain Acede05 Tenerife
Productivity Mgs In Spain Acede05 TenerifeProductivity Mgs In Spain Acede05 Tenerife
Productivity Mgs In Spain Acede05 Tenerife
 
Fiscal Priorities for Long-Run Growth
Fiscal Priorities for Long-Run GrowthFiscal Priorities for Long-Run Growth
Fiscal Priorities for Long-Run Growth
 

Mehr von Structuralpolicyanalysis

Integrated Data for Policy: A view from New Zealand
Integrated Data for Policy: A view from New ZealandIntegrated Data for Policy: A view from New Zealand
Integrated Data for Policy: A view from New ZealandStructuralpolicyanalysis
 
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...Structuralpolicyanalysis
 
Employer Employee linked data in Italy availability and usage by institusions
Employer Employee linked data in Italy availability and usage by institusionsEmployer Employee linked data in Italy availability and usage by institusions
Employer Employee linked data in Italy availability and usage by institusionsStructuralpolicyanalysis
 
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...Structuralpolicyanalysis
 
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...Structuralpolicyanalysis
 
Labour market policy more than just finding round pegs for round holes
Labour market policy more than just finding round pegs for round holesLabour market policy more than just finding round pegs for round holes
Labour market policy more than just finding round pegs for round holesStructuralpolicyanalysis
 
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITY
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITYHUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITY
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITYStructuralpolicyanalysis
 
What can Machine Learning Do and What Does It Mean for the Economy?
What can Machine Learning Do and What Does It Mean for the Economy?What can Machine Learning Do and What Does It Mean for the Economy?
What can Machine Learning Do and What Does It Mean for the Economy?Structuralpolicyanalysis
 
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsDynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsStructuralpolicyanalysis
 
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsDynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsStructuralpolicyanalysis
 
Review of the evidence on market power, contestability and antitrust
Review of the evidence on market power, contestability and antitrustReview of the evidence on market power, contestability and antitrust
Review of the evidence on market power, contestability and antitrustStructuralpolicyanalysis
 
Telling macro stories about productivity from micro data
Telling macro stories about productivity from micro dataTelling macro stories about productivity from micro data
Telling macro stories about productivity from micro dataStructuralpolicyanalysis
 
Keeping pace with technological change: the role of capabilities and dynamism
Keeping pace with technological change: the role of capabilities and dynamismKeeping pace with technological change: the role of capabilities and dynamism
Keeping pace with technological change: the role of capabilities and dynamismStructuralpolicyanalysis
 

Mehr von Structuralpolicyanalysis (20)

Integrated Data for Policy: A view from New Zealand
Integrated Data for Policy: A view from New ZealandIntegrated Data for Policy: A view from New Zealand
Integrated Data for Policy: A view from New Zealand
 
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...
AI and Technological Anxiety: Paranoia , or are the robots out to get us Comm...
 
Wrap-up and way forward
Wrap-up and way forwardWrap-up and way forward
Wrap-up and way forward
 
Closing remarks
Closing remarksClosing remarks
Closing remarks
 
Employer Employee linked data in Italy availability and usage by institusions
Employer Employee linked data in Italy availability and usage by institusionsEmployer Employee linked data in Italy availability and usage by institusions
Employer Employee linked data in Italy availability and usage by institusions
 
Rent sharing across Production network
Rent sharing across Production networkRent sharing across Production network
Rent sharing across Production network
 
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...
EMPLOYEE AUTONOMY AND THE WITHIN-FIRM GENDER WAGE GAP: THE CASE OF TRUST-BASE...
 
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...
NATIONAL WAGE EQUALIZATION AND REGIONAL MISALLOCATION: EVIDENCE FROM ITALIAN ...
 
Labour market policy more than just finding round pegs for round holes
Labour market policy more than just finding round pegs for round holesLabour market policy more than just finding round pegs for round holes
Labour market policy more than just finding round pegs for round holes
 
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITY
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITYHUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITY
HUMAN CAPABILITIES – MANAGERIAL CAPITAL, ORGANISATIONAL PRACTICES AND MOBILITY
 
What can Machine Learning Do and What Does It Mean for the Economy?
What can Machine Learning Do and What Does It Mean for the Economy?What can Machine Learning Do and What Does It Mean for the Economy?
What can Machine Learning Do and What Does It Mean for the Economy?
 
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsDynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
 
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit ConditionsDynamism Diminished: The Role of Housing Markets and Credit Conditions
Dynamism Diminished: The Role of Housing Markets and Credit Conditions
 
Review of the evidence on market power, contestability and antitrust
Review of the evidence on market power, contestability and antitrustReview of the evidence on market power, contestability and antitrust
Review of the evidence on market power, contestability and antitrust
 
Telling macro stories about productivity from micro data
Telling macro stories about productivity from micro dataTelling macro stories about productivity from micro data
Telling macro stories about productivity from micro data
 
Keeping pace with technological change: the role of capabilities and dynamism
Keeping pace with technological change: the role of capabilities and dynamismKeeping pace with technological change: the role of capabilities and dynamism
Keeping pace with technological change: the role of capabilities and dynamism
 
Chiara Criscuolo
Chiara CriscuoloChiara Criscuolo
Chiara Criscuolo
 
Misato Sato
Misato SatoMisato Sato
Misato Sato
 
Ralph Martin
Ralph MartinRalph Martin
Ralph Martin
 
Gemma Thomas
Gemma ThomasGemma Thomas
Gemma Thomas
 

Kürzlich hochgeladen

Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Amil baba
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςNewsroom8
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxDrRkurinjiMalarkurin
 
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxhiddenlevers
 
2B Nation-State.pptx contemporary world nation
2B  Nation-State.pptx contemporary world nation2B  Nation-State.pptx contemporary world nation
2B Nation-State.pptx contemporary world nationko9240888
 
10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdfglobusfinanza
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureResolutionFoundation
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptxHenry Tapper
 
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareAon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareHenry Tapper
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024prajwalgopocket
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final projectninnasirsi
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward
 
(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequalityGRAPE
 
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxBanking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxANTHONYAKINYOSOYE1
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfSteliosTheodorou4
 
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfZimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfFREELANCER
 
Demographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityDemographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityGRAPE
 

Kürzlich hochgeladen (17)

Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
 
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
 
2B Nation-State.pptx contemporary world nation
2B  Nation-State.pptx contemporary world nation2B  Nation-State.pptx contemporary world nation
2B Nation-State.pptx contemporary world nation
 
10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the future
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx
 
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareAon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final project
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024
 
(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality
 
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxBanking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptx
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdf
 
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfZimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
 
Demographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityDemographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequality
 

Productivity Dynamics and Inflation over the Medium Term

  • 1. Productivity Dynamics over the Medium Term Diego Comin Dartmouth College
  • 2. Factsabout Productivityand Inflation  Slowdown in Productivity Growth, since 2005 or so until recently  Where TFP growth seems to have started to grow at (or slightly above) pre-GR growth rate  Slowdown in TFP concentrated in followers  Wide-spread across countries  Inflation was higher than expected during and after GR  But lower than expected once short-run output converged
  • 4. 0 0.5 1 1.5 2 2.5 3 2001 2004 2007 2010 2013 2016 2019 inflation Predicted Inflation
  • 5. Goals  Present a simple model that accounts for these patterns  Importantly, model was developed to study productivity growth during the GR  Accounts for productivity growth before GR, and recent recovery  Also accounts for evolution of inflation during and after GR and during recent recovery  Key mechanism: Cyclical response to technology adoption to discount rate shocks  Provide evidence on the mechanism  A historical account of productivity dynamics and inflation over the medium term
  • 6. Model 1. 𝑦𝑦𝑡𝑡 = 𝑦𝑦𝑡𝑡 𝑝𝑝 + 𝑦𝑦𝑡𝑡 𝑠𝑠 2. 𝑦𝑦𝑡𝑡 𝑠𝑠 = �𝛼𝛼χχ𝑡𝑡 + �𝛼𝛼𝑅𝑅 𝑅𝑅𝑡𝑡 3. ∆𝑦𝑦𝑡𝑡 𝑝𝑝 = ̅𝜌𝜌∆𝑎𝑎𝑡𝑡 4. ∆𝑎𝑎𝑡𝑡 = ̅𝜈𝜈𝜆𝜆 𝜆𝜆𝑡𝑡−1 + ̅𝜈𝜈 𝑧𝑧𝑡𝑡−1 − 𝑎𝑎𝑡𝑡−1 5. 𝜆𝜆𝑡𝑡 = ̅𝛾𝛾𝑦𝑦 𝑦𝑦𝑡𝑡 𝑠𝑠 − ̅𝛾𝛾𝑅𝑅 𝑅𝑅𝑡𝑡 6. ∆�𝜋𝜋𝑡𝑡 = ̅𝜅𝜅𝑚𝑚𝑚𝑚𝑡𝑡 + 𝜀𝜀𝑡𝑡 7. 𝑚𝑚𝑚𝑚𝑡𝑡 = − ̅𝜂𝜂𝑎𝑎 𝑎𝑎𝑡𝑡 + ̅𝜂𝜂𝑦𝑦 𝑦𝑦𝑡𝑡 𝑠𝑠 8. ∆𝑧𝑧𝑡𝑡+1 = χ𝑡𝑡 + ̅𝜃𝜃𝑠𝑠𝑡𝑡
  • 8. Figure 2: R&D Expenditures by US Corporations, 1983-2013 1984 1987 1990 1993 1995 1998 2001 2004 2006 2009 2012 -0.15 -0.1 -0.05 0 0.05 0.1 R&D Expenditure by US Corporations Log-linearly detrended data. Source: R&D Expenditure by US corporations (National Science Foundation). Data are deflated by the GDP deflator and divided by the civilian population older than 16 (see Appendix A.1 for data sources). 6
  • 9. Cyclical Adoption: A Shred of Evidence Survey data: sample of 26 production technologies that di¤used at various times over the period 1947-2003 in the US (5) and the UK (21). mit fraction of potential adopters that have adopted technology i at time t – ! ratio of adopters to non-adopters rit = mit=(1 mit) – ! speed of di¤usion Speedit = 4 ln(rit) Econometric speci…cation Speedit = i + 1lagit + 2(lagit)2 + byt + it; lagit time from introduction of technology i byt detrended output 3
  • 10. Table 1: Cyclicality of the Speed of Technology Diffusion I II III IV yt 3.73 3.7 3.64 4.12 (3.59) (2.81) (3.94) (3.17) yt * US 0.07 -0.74 (0.04) (0.53) lagit -0.057 -0.057 (5.22) (4.76) lag2 it 0.001 0.001 (2.52) (2.12) ln(lagit) -0.29 -0.29 (6.68) (6.65) R2 (within) 0.11 0.11 0.13 0.13 N technologies 26 26 26 26 N observations 327 327 327 327 Notes: (1) dependent variable is the speed of diffusion of 26 technologies, (2) all regressions include technology specific fixed effects. (3) t-statistics in parenthesis, (4) yt denotes the cycle of GDP per capita in the country and represents the high and medium term components of output fluctuations, (5)yt*US is the medium term cycle of GDP per capita times a US dummy, (6) lag represents the years since the technology first started to diffuse. speed of diffusion and the cycle. Diffusion speed was lowest in the deep 1981-82 recession; it recovered during the 80s and declined again after the 1990 recession. It increased notably during the expansion in the second half of the 90s and declined again with the 2001 recession. Next, we turn our attention to study the evolution of the speed of technology diffu- sion during the Great Recession. Due to its recent nature, the evidence we have is more anecdotal. Eurostat provides information on the diffusion of three relevant internet-related technologies in the UK.6 Figure 4 plots their average diffusion from 2004 until 2013 with the business cycle downturns in the UK. The figure confirms the pro-cyclicality of the speed of diffusion of these technologies. In particular, during the downturn corresponding to the Great Recession (2008-2009), the average speed of diffusion of our three technologies sharply declined by 75%. After the Great Recession, the speed of diffusion recovered and converged 6 The measures we consider are the fraction of firms that (i) have access to broadband internet, that (ii) actively purchase online products and services and that (iii) actively sell online products and services (actively is defined as constituting at least 1% of sales/purchases). For each of these three measures we construct the speed of technology diffusion using expression (2), and then filter the effect of the lag since the introduction of the technology using expression (3) and the estimates from column 3 of Table 1. The resulting series are demeaned so that they can be interpreted as percent deviations from the average speed of technology diffusion. 8
  • 11. Figure 3: Speed of Diffusion 1980 1985 1990 1995 2000 2005 −0.3 −0.25 −0.2 −0.15 −0.1 −0.05 0 0.05 0.1 0.15 0.2 Avg. diffusion Avg. diffusion (3 year MA) to approximately 8% below average. Beyond its cyclicality, the second observation we want to stress from the Figure is that fluctuations in the speed of diffusion are very wide, ranging from 86% above average in 2004 to 74% below the average diffusion speed in 2009. Finally, Andrews et al. (2015) have recently provided complementary evidence that tech- nology diffusion in OECD countries may have slowed during the Great Recession. In their study, they show that the gap in productivity between the most productive firms in a sector (leaders) and the rest (followers) has increased significantly during the Great Recession.7 Andrews et al. (2015) show that the most productive firms have much greater stocks of patents which suggests that they engage in more R&D activity. They interpret the increase in the productivity gap as evidence that followers have slowed down the rate at which they incorporate frontier technologies developed by the leaders. These co-movement patterns between the business cycle and measures of investments in technology development as well as measures of the rate of technology adoption is, in our view, sufficiently suggestive evidence to motivate the quantitative exploration we conduct through the lens of our model. 7 In manufacturing the productivity gap increased by 12% from 2007 and 2009, and in services by ap- proximately 20%. 9
  • 12. Figure 4: Diffusion Speed for 3 Internet Technologies in the UK, 2004-2013 2004 2005 2006 2008 2009 2010 2012 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 Diffusion Speed for 3 Internet Technologies in UK Source: Eurostat; see footnote 6 for details of calculations. Shaded areas are UK recession dates as dated by UK ONS. 10
  • 13. 0 0.002 0.004 0.006 0.008 0.01 0.012 0.014 0.016 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Adoption Outputs in Germany % sales from company improvements in products Unit cost reductions (right axis)
  • 14. 0 0.01 0.02 0.03 0.04 0.05 0.06 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Adoption Costs in Germany Adoption costs
  • 16. Q3-87 Q1-93 Q3-98 Q1-04 Q3-09 Q1-15 -6 -4 -2 0 2 4 6 8 TFP Endogenous Component of TFP Labor Productivity
  • 17. Q1-85 Q1-90 Q1-95 Q1-00 Q1-05 Q1-10 Q1-15 -15 0 15 2 5 8 A Z (right axis)
  • 18. TakeAwayTFP  Slowdown in TFP largely due to endogenous component  During GR and post-GR: liquidity demand slows down adoption rate  Prior to GR: R&D productivity declines in 2001, and this leads to lower TFP growth from 2005-2008  In recent times: adoption rate stabilized, and TFP grows at pre-GR rate due to catch up  Heterogeneity in adoption between leaders and followers could explain TFP divergence
  • 19. Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 -3 -2.5 -2 -1.5 -1 -0.5 0 0.5 1 1.5 2 Baseline Model (Data) Exogenous TFP Model
  • 20. Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 Baseline Model (Data)
  • 21. TakeAway inflation  Higher than expected inflation during and after GR, due to lower level of endogenous TFP  (Due to TFP convergence) this effect has disappeared and now endogenous TFP leads to lower than expected inflation