Trend Productivity Growth Research Articles

СОВРЕМЕННЫЕ ТЕНДЕНЦИИ РОСТА ПРОИЗВОДИТЕЛЬНОСТИ ТРУДА В РОССИИ

The set growth rates of the Russian economy require the development and implementation of new approaches and tools for the implementation of the national development strategy. One of these tools is the growth of labor productivity. As a multifactorial category, labor productivity is achieved by the best use of all factors of production, machinery, technology, the human factor, organization and management processes. Labor productivity is one of the most important indicators of economic efficiency, the country's GDP is formed under the influence of labor productivity, and a number of economic and social tasks are being solved. For businesses, labor productivity is a measure of the efficiency and well-being of both owners and staff. Today, labor productivity growth is influenced by automation and digitalization, improvement of production and management organization, and better use of the human factor. Ensuring a steady rate of labor productivity growth, the state is implementing an appropriate national project, without which it will be problematic to achieve the goals of sustainable development. The article presents the results of the analysis of labor productivity growth trends in Russia. The problem of labor productivity growth is being solved at the state level through the implementation of the national project "Labor Productivity" by creating favorable conditions for productivity growth, involving the subjects of the country and enterprises in this process. The key trends in productivity growth are related to the optimization of processes at the enterprise, modernization and digitalization of equipment and technologies, increasing staff employment time and improving their skills. The study revealed shortcomings in the implementation of the national project and deepening trends in labor productivity growth, which makes it possible to develop measures to eliminate them.

Productivity and Exports: An Industry-Level Analysis of the Service Sector in India

The large share of the service sector and its status as a net exporter raise concerns about the sustainability of such growth for a developing economy like India. Given the context, the present article attempts to examine the productivity dynamics of the service sector in India at the industry level. We use the India KLEMS dataset to identify the trends in total factor productivity (TFP) growth and the growth in factor inputs. By uniquely combining the India KLEMS dataset with the trade values in the Extended Balance of Payments Services classification, we examine the dynamics between TFP growth and exports of services using panel vector autoregression technique. The trends in factor inputs show that there is capital deepening within services and the growth in employment remained comparatively lower. The results indicate a feedback effect of exports and productivity growth within the service sector. Additionally, we note that the use of more skilled labour that is better equipped to handle new technology also contributes to growth in the service sector, both in terms of productivity and exports.

The Determinants of Agricultural Output Growth in Ethiopia

The purpose of this paper is to look into the determinants of agricultural output growth in Ethiopia. Along with this general objective, this study intends to look at the trend of total factor productivity growth in the agricultural sector and its contribution to agricultural output growth. Using autoregressive distributed lag model bounds testing, this research estimates the long-run and short-run cointegration between agricultural output growth and the total factor productivity. In this study, Augmented Dickey-Fuller and Phillip-Perron unit root tests were used to find out the order of integration of the variables. The selected econometric model goes through all the diagnostic tests and confirms the absence of heteroscedasticity, serial correlation, and normality. The finding of this study indicates that total factor productivity, agricultural land, agricultural machinery, and fertilizer all have a significant and positive effect on the growth of agricultural output. According to the findings of this study, total factor productivity is the primary driver of agricultural output growth. Therefore, as it has played a strong role in developed countries' agriculture, total factor productivity has the potential to be a game-changer in terms of sustainable agricultural growth. Taking into account the findings of this study, we strongly recommend that the government of Ethiopia should devise policies in the agricultural sector that could enhance the level of total factor productivity.

New trend of agricultural productivity growth in sub-Saharan Africa

The literature argues that increasing the total factor productivity in agriculture is prior to off-farm growth and poverty alleviation. The debate persists on a robust estimate of agricultural productivity growth that includes multifactor. So, this study applies the stochastic frontier analysis with heteroscedasticity correction, to examine the total factor productivity growth in a sample of 23 countries in Sub-Saharan Africa over the 1991-2015 period. The results show that the estimated elasticity of production with respect to land, machinery capital and fertilizer are positive and statistically significant. Whereas, the estimated elasticity of production to labour is positive but not significant. This result calls into question the productivity of labour in the African agricultural system. After the 2000s, the average annual growth rate of agricultural productivity is estimated at 3.13% for the sample countries. A net increase in total factor productivity is accompanied by a significant increase in technological change. Scale efficiency change is the major barrier to TFP growth in African agriculture. So, it is recommended that public or private decision-makers must stress more on: (i) human capital investment along with more efficient management of cultivated land and, (ii) the acceleration of agricultural technology adoption.

Regional and sectoral performance of brazilian labour productivity in the period 2004-2014

This study aimed to analyze the behaviour of Brazilian labour productivity (2004-2014) and its impact on growth, seeking which regions and sectors contributed most to the low aggregate productivity. The trend of productivity growth is positive, and the worked hour had a smaller growth than the per person employed, indicating an increase in the workday. The results indicate that there was a growth in agricultural productivity, a fall in industry, and stagnation in services. The regions with the best performance were the North, Northeast and Center-West. The sectoral productivity performance in the country was found to be mainly due to intrasectoral productivity, so the low growth was due to the lack of growth within sectors, except in the North, where structural change significantly contributed to the good regional performance. Yet the econometric estimates showed that only in services the elasticity of productivity was higher than that of physical capital.

Decomposition of climate-induced productivity growth in Indian agriculture

This paper adopts a stochastic frontier approach to investigate the trend and determinants of total factor productivity (TFP) growth in the agriculture sector of India, using extensive district-level data. The assessment of the production frontier highlights the efficiency aspect of Indian agriculture and contributes to an analysis of those factors that might be directly engaged in the production process. After controlling for the district-specific climatic effect in the production of eighteen major crops, TFP growth is deconstructed into technical progress, technical efficiency change and scale effects. Four weather parameters, average temperature, rainfall, evapotranspiration and windspeed, are defined as exogenous determinants of the technical inefficiency term to analyze the influence of changing climate. Based on the true fixed effect model and maximum likelihood method, the estimated TFP growth averaged 0.688% per year between 1990 and 2015. The relative performance of Indian states apparently differs according to estimated productivity scores. The findings show that changes in technical efficiency account for most TFP growth, whereas differences in scale components account for annual and cross-state productivity growth disparities. The study suggests that region-specific policies are required to enhance agricultural productivity and add to the understanding of the arguments over TFP growth in Indian agriculture.

Trends in Productivity Growth of Indian Pharmaceutical Industry: A Growth Accounting Analysis

The pharmaceutical industry of India is one of the most rapidly expanding research-based industries of Indian manufacturing. This paper attempts to examine the trends in partial and total factor productivity (TFP) growth of India’s pharmaceutical industry using industry-level time series data covering a period of 25 years from 1993-94 to 2017-18, which is further divided into pre-product and post-product patent periods. Three alternative indices of growth accounting approach viz., Translog, Solow, and Kendrick have been used to measure the growth of total factor productivity with four input production framework. The study results indicate significant increasing trends in capital intensity as well as labour, energy and material productivity and a significant declining trend in capital productivity over the entire study period. This study also finds a positive turnaround in the TFP growth of Indian’s pharmaceutical industry during the post-product patent era. The decomposition analysis confirms that output growth in the pharmaceutical industry is input-driven rather than productivity-driven as TFP growth contributes only 8.5 percent to the observed output growth. From the policy standpoint, this paper also suggests greater emphasis on resource efficiency by improving the quality of factor inputs, particularly capital, through increased R&D activities and adoption of cutting-edge technology.

Measurement of Total Factor Productivity in Iranian Economic Sectors: Malmquist Index Analysis

Productivity has an important and effective role in the growth of production and increasing the competitiveness of countries. In this study, using the Malmquist productivity index, the total productivity growth trend of production factors in three important sectors of the Iranian economy (agriculture, industry and services) during the years 2012-2017 have been discussed. The results showed that during the study period total factors productivity changes in all economic sectors except the industrial sector are due to technological changes, and in the industrial sector, both technical efficiency and technological changes have affected the productivity of this sector. Therefore, the growth of total factor productivity in the agricultural sector has had a negative trend with a decrease of 1.5% and in industry and services has had a positive trend with 7% and 11.3%, respectively.

Technical Efficiency and Productivity Change in the European Union with Undesirable Output Considered

Global competition and climate change are changing the nature of economic activity and impose the urgent need to have environmentally sensitive productivity growth. The paper addresses both desirable and undesirable output to assess technical efficiency and productivity changes, as well as evaluate the importance of an energy input in the production function and productivity change differentials in the European Union (EU) over the period 2000–2018. To that end, it uses output-oriented data envelopment analysis and Malmquist productivity analysis. The results reveal that the EU is facing significant challenges due to a decreasing trend in technical efficiency and slow productivity growth. The absence of major improvements in human resource performance has reduced the benefits of technological innovations which are the main source of productivity growth. Additionally, the results show that energy use did not critically influence efficiency and productivity.

Productivity and the pandemic: short-term disruptions and long-term implications

This paper analyses quarterly estimates of productivity growth at industry level for three advanced economies, France, the UK and the US, for 2020. We use detailed industry-level data to distinguish reallocations of working hours between industries from pure within-industry productivity gains or losses. We find that all three countries showed positive growth rates of aggregate output per hour in 2020 over 2019. However, after removing the effects from the reallocation of hours between low and high productivity industries, only the US still performed positively in terms of within-industry productivity growth. In contrast, the two European economies showed negative within-industry productivity growth rates in 2020. While above-average digital-intensive industries outperformed below-average ones in both France and the UK, the US showed higher productivity growth in both groups compared to the European countries. Industries with medium-intensive levels of shares of employees working from home prior to the pandemic made larger productivity gains in 2020 than industries with the highest pre-pandemic work-from-home shares. Overall, after taking into account the productivity collapse in the hospitality and culture sector during 2020, productivity growth shows no clear deviation from the slowing pre-pandemic productivity trend. Future trends in productivity growth will depend on whether the favourable productivity gains (or smaller losses) in industries with above-average digital intensity will outweigh negative effects from the pandemic, in particular scarring effects on labour markets and business dynamics.

The global productivity growth and research productivity declines: the (urgent) need for a 'fifth industrial revolution' imperative

Given that the first, second, and third industrial revolutions might be defined by their radical impact on productivity, and that the productivity gains promised by the 'fourth industrial revolution' have largely failed to materialise in the productivity statistics, particularly in total factor productivity, this article discuses certain theory that predicts the next radical increase in productivity, and that suggests ways to enable it. In doing so, a proposed research agenda is made explicit, with the goal of reversing the set of global declining trends in productivity growth, research productivity, and the failure of emergent technologies to contribute to these forms of productivity. The goal of this proposed research agenda is to uncover and predict the source of the next radical increase in productivity, and given its importance, this research agenda is taken to relate to what might be usefully called the 'fifth industrial revolution'.

Trend Growth and Robust Monetary Policy

Abstract Recent monetary policy studies have shown that the trend productivity growth has non-trivial implications for monetary policy. This paper investigates how trend growth alters the effect of model uncertainty on macroeconomic fluctuations by introducing a robust control problem. We show that an increase in trend growth reduces the effect of the central bank’s model uncertainty and, hence, mitigates the large macroeconomic fluctuations. Moreover, the increase in trend growth contributes to bringing the economy into determinacy regions even if larger model uncertainty exists. These results indicate that trend growth contributes to stabilizing the economy in terms of both variance and determinacy when model uncertainty exists.

International risk sharing in emerging economies

AbstractThis study investigates the apparent lack of insurance against country‐specific risk observed internationally. Using a sample of 21 emerging and 21 advanced economies over the period 1980–2014, I document new evidence from international co‐movements of prices and quantities suggesting that risk sharing is worse in emerging economies than in advanced economies. I then extend a standard international business cycle model to assess the implications of the “cycle is the trend” hypothesis for international risk sharing. I show that shocks to trend productivity growth provide a compelling explanation for the distinct risk‐sharing features of emerging market economies. The findings of this study are relevant for the conduct of stabilization policy, as it critically depends on the nature of the shocks that affect an economy.

Trend Growth and Robust Monetary Policy

Recent monetary policy studies have shown that the trend productivity growth has non-trivial implications for monetary policy. This paper investigates how trend growth alters the effect of model uncertainty on macroeconomic fluctuations by introducing a robust control problem. We show that an increase in trend growth reduces the effect of the central bank's model uncertainty and, hence, mitigates the large macroeconomic fluctuations. Moreover, the increase in trend growth contributes to bringing the economy into determinacy regions even if larger model uncertainty exists. These results indicate that trend growth contributes to stabilizing the economy in terms of both variance and determinacy when model uncertainty exists.

International Risk Sharing in Emerging Economies

This study investigates the apparent lack of insurance against country-specific risk observed internationally. Using a sample of 21 emerging and 21 advanced economies over the period 1980-2014, I document new evidence from international co-movements of prices and quantities suggesting that risk sharing is worse in emerging economies than in advanced economies. I then extend a standard international business cycle model to assess the implications of the “cycle is the trend” hypothesis for international risk sharing. I show that shocks to trend productivity growth provide a compelling explanation for the distinct risk-sharing features of emerging market economies. The findings of this study are relevant for the conduct of stabilization policy, as it critically depends on the nature of the shocks that affect an economy.

Belgium

This 2020 Article IV Consultation with Belgium highlights that economic activity has held up relatively well over the last year, but the outlook is clouded by unusual uncertainty and risks. The coronavirus outbreak is expected to reduce growth this year, and the outlook is highly uncertain and subject to risks, including more widespread and damaging effects of the coronavirus, escalating trade tensions, a sharper euro-area growth slowdown, and prolonged domestic political gridlock. Policies should focus on addressing the coronavirus outbreak in the near term and rebuilding resilience and addressing structural challenges in the medium run. The immediate policy priority is to contain the spread and damaging effects of the coronavirus through targeted temporary support measures to affected firms and individuals, while ensuring that the healthcare system has adequate resources to address the crisis. Reversing the declining trend in productivity growth is essential to support higher standards of living and safeguard fiscal sustainability. Thus, reform efforts would need to focus on reducing red tape for start-ups, lowering regulatory barriers to competition in key sectors, supporting access to venture capital for innovative firms, and boosting public investment in infrastructure, fiscal space permitting.

Subdued Potential Growth: Sources and Remedies

Global potential output growth has been flagging. At 2.5 percent in 2013-17, post-crisis potential growth is 0.5 percentage point below its longer-term average and 0.9 percentage point below its average a decade ago. Compared with a decade ago, potential growth has declined 0.8 percentage point in advanced economies and 1.1 percentage point in emerging market and developing economies. The slowdown mainly reflected weaker capital accumulation but is also evidence of decelerating productivity growth and demographic trends that dampen labor supply growth. Unless countered, these forces are expected to continue and to depress global potential growth further by 0.2 percentage point over the next decade. A menu of policy options is available to help reverse this trend, including comprehensive policy initiatives to lift physical and human capital and to encourage labor force participation by women and older workers.

ИНТЕЛЛЕКТУАЛЬНЫЙ КАПИТАЛ КАК ФАКТОР ПОВЫШЕНИЯ ПРОИЗВОДИТЕЛЬНОСТИ ТРУДА

This article is devoted to the analysis of labor productivity growth trends in Russia and in the world, taking into account the influence of the intellectual component of the labor force on it. The concepts of intellectual capital and digital competence are characterized. The intellectual capital of a person is considered in the article as the intellectual characteristics of labor resources that have economic potential. Digital competence in economics is defined as an evaluative characteristic of person’s knowledge, skills and abilities to use digital technology, communications tools, and/or networks in all spheres of life in order to participate more effectively in social and economic processes. The necessary conditions for the growth of labor productivity on the basis of the labor intellectualization are formulated.

Productivity Growth in Food Manufacturing Industry: Empirical Evidence from Post-reform Sri Lanka

The objective of this article is to measure productivity growth in Sri Lanka’s food manufacturing industry during the 1978–2014 period and briefly review the policy measures adopted over time aiming to improve productivity in the industry. Total Factor Productivity (TFP) growth trends were measured adopting the Cobb–Douglas production function framework using the data extracted from the Annual Surveys of Industries conducted by the Department of Census and Statistics, Sri Lanka. TFP growth was computed for the entire industry as well as for its sub-divisions with emphasis on the scale of operation, type of industry, and policy regimes. Even though the average TFP growth in Sri Lanka’s food manufacturing industries was found to be negative (−0.61%) for the entire period (1978–2014), it is noteworthy that average TFP growth improved over time from −2 per cent during the 1978–1994 sub-period to 0.7 per cent over the 1994–2014 sub-period. Furthermore, large-scale food manufacturing industries achieved higher TFP growth compared to that of their small-scale counterparts. Distilling, rectifying spirits, manufacture of grain mill products and prepared animal feeds industries showed positive and higher TFP growth while cocoa, chocolate and confectionery industries demonstrated a lower TFP growth. Food safety management systems and investments in infrastructure through Public-Private Partnerships were some policy measures that led the productivity growth in Sri Lanka’s food manufacturing industries.

REGIME-SWITCHING PRODUCTIVITY GROWTH AND BAYESIAN LEARNING IN REAL BUSINESS CYCLES

Growth in total factor productivity (TFP) in the USA has slowed down significantly since the mid-2000s, reminiscent of the productivity slowdown of the 1970s. This paper investigates the implications of a productivity slowdown on macroeconomic variables using a standard real business cycle (RBC) model, extended with regime-switching in trend productivity growth and Bayesian learning regarding the growth regime. I estimate the Markov-switching parameters using US data and maximum-likelihood methods, and compute the model solution using global projection methods. Simulations reveal that, while adding a regime-switching component to the standard RBC setup increases the volatility in the system, further incorporating incomplete information and learning significantly dampens this effect. The dampening is mainly due to the responses of investment and labor in response to a switch in the trend component of TFP growth, which are weaker in the incomplete information case as agents mistakenly place some probability that the observed decline in TFP growth is due to the transient component and not due to a regime switch. The model offers an objective way to infer slowdowns in trend productivity, and suggests that macroeconomic aggregates in the USA are currently close to their potential levels given observed productivity, while counterfactual simulations indicate that the cost of the productivity slowdown to US welfare has been significant.