Long run labour productivity growth: Is there a "New Economy"?
-
Upload
yetta-owen -
Category
Documents
-
view
26 -
download
0
description
Transcript of Long run labour productivity growth: Is there a "New Economy"?
Long run labour productivity growth: Is there a "New Economy"?
Average percentage growth rates of value added per labor hour(= labor productivity growth)
EU-14* USA Japan
195060 4.2 3.6 5.9
196073 5.7 2.6 8.4
197380 3.0 1.0 2.7
198190 2.1 1.5 3.0
199100 2.2 1.6 2.0
199195 2.3 1.1 1.8
199600 2.0 2.0 (!) 2.3
*Excluding LuxemburgSource: Computed from Groningen Growth and Development Centre data (www.eco.rug.nl/ggdc/)
Is there a "New Economy"?
• ICT obviously offers new possibilities for raising productivity
• There is a remarkable increase in rates of labour productivity growth in the USA after 1995!
• A considerable part of that rise comes from the ICT sector!
• Euphoria: The business cycle that started in the US in 1991 showed very little inflation, even towards its peak (thanks to efficiency gains from ICT!)
The Kondratieff cycle of 45-60 years length
Origin:• Observation of approximately 50 year periods of
inflation and deflation since ca. 1780• Observation of similar fluctuations in real interest
rates • Important authors: Nikolai Kondratieff, Jan van
Gelderen, Sam de Wolff; 1913-1926
Common sense at those times:• Times of inflation are "good" (demand > supply)• Times of deflation are "bad" (supply > demand)
More recent research
• Proof of long-run fluctuations in GNP, industrial production etc. (Bieshaar & Kleinknecht; Metz; Reijnders)
• Marxist theories of long-run fluctuations in profit rates (Shaikh, Poletayev, Menshikov, Reati)
• Schumpeterian theories of clusters of basic innovations (Mensch, Van Duijn, Haustein & Neuwirth, Kleinknecht)
Stylised Kuznets (1930) model: Breakthrough innovations that create new industries are distributed
randomly over the time-axes
Stylised Schumpeter (1939) model: Breakthrough innovations tend to cluster on the time-axes
Scheme of Schumpeter-Kondratieff waves
'Good' periods:
'Bad' periods:
Basic industries: Infrastructures:
1st wave
ca. 1780/90 to 1810/17
1810/17 to 1844/51
Textiles, metals, shipbuilding
Ports, canals, water power, streets
2nd wave
ca. 1844/51 to 1870/75
1870/75 to 1890/96
Coal, gas, steam engine, mechanical engineering
Railway and telegraph networks, steam ship, gas lightening
3rd wave
1890/96 to 1914/20
1914/20to 1945/49
Steal, electricity, metals, chemicals
Electricity network, steel ship, telephone
4th wave
1945/49 to 1966-74
1966/74to 1992/94
Petroleum, automobiles, durable consumer goods
Highways, airports, tankers, refineries
5th wave
1992/94 to ? ? Internet, digital data processing, info-services etc.
digital networks
Types of cycles:
• Juglar cycle ('classical business cycle‘; 7-10 years): periodic over-investment
• Schumpeter-Kondratieff cycle (45-60 years): new technological trajectories (railways, telephone, electricity, IT, etc.)
Less important:• Kitchin cycle (inventory cycle)• Kuznets cycle (migration cycle)