Is there still a productivity paradox? two methods for a transatlantic comparison

Abstract

Economic activity accelerated in the United States, in the second part of the cycle, after 1995, within an environment of decreasing inflation. France has followed a qualitatively similar path since 1997, also clearly suggesting the effects of a positive supply shock. The spread of new information and communication technologies (NICT) partly explains these singular events. On one hand, a calculation of contributions to output growth suggests that they would explain about half of the increase in activity in the United States and one-fifth in France. On the other hand, a trend/cycle decomposition reveals that the structural acceleration in output and productivity gains in the United States are very much restricted to industries producing NICT and there is a rather small break in productivity gains. In France, where differences between sectors are not so clear-cut, the diffusion of NICT has been accompanied by a slowdown in trends in productivity gains. In both cases, there is little room left for the effects of the diffusion of technical progress associated with NICT.