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John G. Fernald

Senior Research Advisor
International Research
Macroeconomics, Productivity growth, China’s economy

John.Fernald (at) sf.frb.org

Profiles: Google Scholar | Personal website

Working Papers
Productivity in the World Economy During and After the Pandemic

2023-29 | with Li | September 2023


This paper reviews how productivity has evolved around the world since the pandemic began in 2020. Productivity in many countries has been volatile. We conclude that the broad contours of productivity growth during this period have been heavily shaped by predictable cyclical patterns. Looking at U.S. industry data, we find little evidence that the sharp rise in telework has had a notable impact, good or bad, on productivity. Stepping back, the data so far appear consistent with a continuation of the slow-productivity-growth trajectory that we faced before the pandemic.

The Impact of COVID on Productivity and Potential Output

2022-19 | with Li | September 2022


The U.S. economy came into the pandemic, and looks likely to leave it, on a slow-growth path. The near- term level of potential output has fallen because of shortfalls in labor that should reverse over time. Labor productivity, to a surprising degree, has followed an accelerated version of its Great Recession path with initially strong growth followed by weak growth. But, as of mid-2022, it appears that the overall level of labor and total factor productivity are only modestly affected. The sign of the effect depends on whether we use the strong income-side measures of pandemic output growth or the much weaker expenditure-side measures. There is considerable heterogeneity across industries. We can explain some but not all of the heterogeneity through industry differences in cyclical utilization and off-the-clock hours worked. After accounting for these factors, industries where it is easy to work from home have grown somewhat faster than they did pre-pandemic. In contrast, industries where it is hard to work from home have performed extremely poorly.

Dale W. Jorgenson: An Intellectual Biography

2022-08 | March 2022


Dale W. Jorgenson has been a central contributor to a wide range of economic and policy issues over a long and productive career. His research is characterized by a tight integration of economic theory, appropriate data that matches the theory, and sound econometrics. His groundbreaking work on the theory and empirics of investment established the research path for the economics profession. He is a founder of modern growth accounting: Official statistics in many countries, including the United States, implement Jorgenson’s methods. Relatedly, without Jorgenson’s unflagging efforts, consistent industry KLEMS datasets for many countries—which have been widely used in recent decades for growth accounting, econometrics, and other applications—would not exist. Jorgenson is also a pioneer in econometric modeling of producer and consumer behavior and of econometrically estimated, intertemporal general equilibrium modeling for policy analysis.

The UK Productivity “Puzzle” in an International Comparative Perspective

2022-07 | with Inklaar | March 2022


The UK’s slow productivity growth since 2007 has been referred to as a “puzzle”, as if it were a particularly UK-specific challenge. In this paper, we highlight how the United States and northern Europe experienced very similar slowdowns. The common slowdown in productivity growth was a slowdown in total factor productivity (TFP) growth; we find little evidence that capital deepening was an important independent factor. From a conditional-convergence perspective, most of the UK slowdown follows from the slowdown at the U.S. frontier. From the mid-1980s to 2007, the UK’s relative productivity level moved closer to the level of the U.S. and northern Europe, driven by essentially complete convergence in market services TFP. In contrast, manufacturing lost ground relative to the U.S. frontier prior to 2007, and remains far below the frontier. The relative ground lost after 2007 is modest—cumulating to about 4 percentage points—and is largely attributable to somewhat unfavorable industry weights and industry-specific issues in mining, rather than a systematic UK competitiveness problem.

Reassessing Longer-Run U.S. Growth: How Low?

2016-18 | August 2016


What is the sustainable pace of GDP growth in the United States? A plausible point forecast is that GDP per capita will rise well under 1 percent per year in the longer run, with overall GDP growth of a little over 1-1/2 percent. The main drivers of slow growth are educational attainment and demographics. First, rising educational attainment will add less to productivity growth than it did historically. Second, because of the aging (and retirements) of baby boomers, employment will rise more slowly than population (which, in turn, is projected to rise slowly relative to history). This modest growth forecast assumes that productivity growth is relatively “normal,” if modest—in line with its pace for most of the period since 1973. An upside risk is that we see another burst of information-technology-induced productivity growth similar to what we saw from 1995 to 2004.

Shocks and Adjustments

2013-32 | with Daly, Jorda, and Nechio | July 2017


The manner firms respond to shocks reflects fundamental features of labor, capital, and commodity markets, as well as advances in finance and technology. Such features are integral to constructing models of the macroeconomy. In this paper we document secular shifts in the margins firms use, in aggregate, to adjust to shocks that have consequences for the economy’s cyclical behavior. These new business cycle facts on the comovement of output and its inputs are a natural complement to analyzing output and its expenditure components. Our findings shed light on the changing cyclicality of productivity in response to different shocks.

A Quarterly, Utilization-Adjusted Series on Total Factor Productivity

2012-19 | April 2014


This paper describes a real-time, quarterly growth-accounting database for the U.S. business sector. The data on inputs, including capital, are used to produce a quarterly series on total factor productivity (TFP). In addition, the dataset implements an adjustment for variations in factor utilization—labor effort and the workweek of capital. The utilization adjustment follows Basu, Fernald, and Kimball (BFK, 2006). Using relative prices and input-output information, the series are also decomposed into separate TFP and utilization-adjusted TFP series for equipment investment (including consumer durables) and “consumption” (defined as business output less equipment and consumer durables).


quarterly_tfp.xlsx – Data on quarterly utilization-adjusted TFP

Sector-Specific Technical Change

Manuscript | with Basu, Fisher, and Kimball | November 2013


Theory implies that the economy responds differently to technology shocks that affect the production of consumption versus investment goods. We estimate industry-level technology innovations and use the input-output tables to relax the typical assumptions in the investment-specific technical change literature—assumptions that, we find, do not hold in the data.
We find that investment-technology improvements are sharply contractionary for hours, investment, consumption, and output. Consumption-technology improvements, on the contrary, are generally expansionary. Thus, disaggregating technology shocks into consumption and investment-specific changes yields two shocks that both produce business-cycle comovement, and also explain a large fraction of annual changes in GDP and its components. Most of the responses we find are consistent with the predictions of simple two-sector models with sticky prices.

Published Articles (Refereed Journals and Volumes)
The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends?

Forthcoming in Review of Income and Wealth | with Inklaar and Ruzic


This paper reviews advanced-economy productivity developments in recent decades. We focus primarily on the facts about, and explanations for, the mid-2000s labor-productivity slowdown in large European countries and the United States. Slower total factor productivity growth was the proximate cause of the slowdown. This conclusion is robust to measurement challenges including the role of intangible assets, rankings of productivity levels, and data revisions. We contrast two main narratives for the stagnating productivity frontier: The shock of the Global Financial Crisis; and a common slowdown in productivity trends. Distinguishing these two empirically is hard, but the pre-recession timing of the U.S. slowdown suggests an important role for the common-trend explanation. We also discuss the unusual pattern of productivity growth since the start of the Covid-19 pandemic. Although it is early, there is little evidence so far that the large pandemic shock has changed the slow pre-pandemic trajectory of productivity growth.

World Productivity: 1996-2014

Forthcoming in American Economic Journal: Macroeconomics | with Esfahani and Hobijn


We account for the sources of world productivity growth, using data for more than 36 industries and 40 major economies from 1996 to 2014, explicitly taking into account changes in the misallocation of resources in labor, capital, and product markets. Productivity growth in advanced economies slowed but emerging markets grew more quickly which kept global productivity growth relatively constant until around 2010. After that, productivity growth in all major regions slowed. Much of the volatility in world productivity growth reflects shifts in the misallocation of labor across countries and industries. Using new data on PPP-based value-added measures by country and industry, we show that about a third of these shifts is due to employment growing in countries, most notably China and India, that benefit from an international cost advantage. Markups are large and rising and impact the imputed misallocation of capital. However, they have little effect on the country-industry technology contribution to global productivity.

Is China Fudging Its GDP Figures? Evidence from Trading Partner Data (Reprint)

Journal of International Money and Finance 114(102406), June 2021 | with Hsu and Spiegel


We use Chinese imports, measured as reported exports of trading partners, as a benchmark to gauge the accuracy of alternative Chinese indicators (including GDP) of fluctuations in economic activity. Externally-reported imports are likely to be relatively well-measured and free from domestic manipulation. Using principal components, we derive activity indices from a wide range of indicators. We choose a preferred index of eight non-GDP indicators based on their fit to Chinese imports, which we call the China Cyclical Activity Tracker (or C-CAT). We find that Chinese statistics have broadly become more reliable in measuring cyclical fluctuations over time. However, measured GDP has been excessively smooth since 2013, and adds little information relative to combinations of other indicators.

Is China Fudging Its GDP Figures? Evidence from Trading Partner Data

Journal of International Money and Finance 110(102262), February 2021 | with Hsu and Spiegel


We propose using imports, measured as reported exports of trading partners, as an alternative benchmark to gauge the accuracy of alternative Chinese indicators (including GDP) of fluctuations in economic activity. Externally reported imports are likely to be relatively well measured, as well as free from domestic manipulation. Using principal components, we derive activity indices from a wide range of indicators and examine their fit to (trading-partner reported) imports. We choose a preferred index of eight non-GDP indicators (which we call the China Cyclical Activity Tracker, or C-CAT). Comparison with that index and others indicate that Chinese statistics have broadly become more reliable in measuring cyclical fluctuations over time. However, GDP adds little information relative to combinations of other indicators. Moreover, since 2013, Chinese GDP growth has shown little volatility around a gradually slowing trend. Other measures, including the C-CAT and imports, do not show this reduction in volatility. Since 2017, the C-CAT slowed from well above trend to close to trend. As of mid-2019, it was giving the same cyclical signal as GDP.

Does Disappointing European Productivity Growth Reflect a Slowing Trend? Weighing the Evidence and Assessing the Future

International Productivity Monitor 38, September 2020, 104-135 | with Inklaar


In the years since the Great Recession, many observers have highlighted the slow pace of labor and total factor productivity (TFP) growth in advanced economies. This paper focuses on the European experience, where we highlight that trend TFP growth was already low in the runup to the Global Financial Crisis (GFC). This suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. After the mid-1990s, European economies stopped converging, or even began diverging, from the U.S. level of TFP. That said, in contrast to the United States, there is some macroeconomic evidence for some northern European countries that the GFC had a further adverse impact on TFP growth. Still, the challenges for economic policy look surprisingly similar to the ones discussed prior to the Great Recession, even if the policy implications seem less clear.

The Outlook for U.S. Labor Quality

In Education, Skills, and Technical Change: Implications for Economic Growth, NBER Studies in Income and Wealth, ed. by C. Hulten and V. Ramey | NBER/University of Chicago Press, 2018 | with Bosler, Daly, and Hobijn


Over the past 15 years, labor-quality growth has been very strong–defying nearly all
earlier projections–and has added around 0.5 percentage points to an otherwise modest
U.S. productivity picture. Going forward, labor quality is likely to add considerably less
and may even be a drag on productivity growth in the medium term. Using a variety of
methods, we project that potential labor-quality growth in the longer run (7 to 10 years
out) is likely to fall in the range of 0.1 to 0.25 percent per year. In the medium term, labor-
quality growth could be lower or even negative, should employment rates of low-skilled
workers make a cyclical rebound towards pre-recession levels. The main uncertainties
in the longer run are whether the secular decline in employment of low-skilled workers
continues and whether the Great Recession pickup in educational attainment represents
the start of a new boom or is simply a transitory reaction to a poor economy.

Why Has the Cyclicality of Productivity Changed? What Does It Mean?

Annual Review of Economics 8, October 2016, 465-496 | with Wang


U.S. labor and total factor productivity have historically been procyclical—rising in booms and falling in recessions. After the mid-1980s, however, TFP became much less procyclical with respect to hours while labor productivity turned strongly countercyclical. We find that the key empirical “fact” driving these changes is reduced variation in factor utilization—conceptually, the workweek of capital and labor effort. We discuss a range of theories that seek to explain the changes in productivity’s cyclicality. Increased flexibility, changes in the structure of the economy, and shifts in relative variances of technology and “demand” shocks appear to play key roles.

The Pre-Great Recession Slowdown in Productivity

European Economic Review 88(C), April 2016, 3-20 | with Cette and Mojon


In the years since the Great Recession, many observers have highlighted the slow pace of productivity growth around the world. For the United States and Europe, we highlight that this slow pace began prior to the Great Recession. The timing thus suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. For the United States, at the frontier of knowledge, there was a burst of innovation and reallocation related to the production and use of information technology in the second half of the 1990s and the early 2000s. That burst ran its course prior to the Great Recession. Continental European economies were falling back relative to that frontier at varying rates since the mid-1990s. We provide VAR and panel-data evidence that changes in real interest rates have influenced productivity dynamics in this period. In particular, the sharp decline in real interest rates that took place in Italy and Spain seem to have triggered unfavorable resource reallocations that were large enough to reduce the level of total factor productivity, consistent with recent theories and firm-level evidence.

Productivity and Potential Output Before, During, and After the Great Recession

In NBER Macroeconomics Annual, ed. by Parker, Woodford, 2015. 1-51


U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules explanations that focus on disruptions during or since the recession, and industry and state data rule out “bubble economy” stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about ¾ of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.


Fernald_NBER_WP20248_replication.zip – data for replication (244 Mb)
Online_appendix_to.pdf – Online appendix

Monetary Policy Effectiveness in China: Evidence from a FAVAR Model

Journal of International Money and Finance 49(part A), December 2014, 83-103 | with Spiegel and Swanson


We use a broad set of Chinese economic indicators and a dynamic factor model framework to estimate Chinese economic activity and inflation as latent variables. We incorporate these latent variables into a factor-augmented vector autoregression (FAVAR) to estimate the effects of Chinese monetary policy on the Chinese economy. A FAVAR approach is particularly well-suited to this analysis due to concerns about Chinese data quality, a lack of a long history for many series, and the rapid institutional and structural changes that China has undergone. We find that increases in bank reserve requirements reduce economic activity and inflation, consistent with previous studies. In contrast to much of the literature, however, we find that changes in Chinese interest rates also have substantial impacts on economic activity and inflation, while other measures of changes in credit conditions, such as shocks to M2 or lending levels, do not once other policy variables are taken into account. Overall, our results indicate that the monetary policy transmission channels in China have moved closer to those of Western market economies.


wp2014-07supplement_replication_files.zip – data for replication (6.8 Mb)

Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly

National Institute Economic Review 228, May 2014, R58-R64 | with Nechio, Daly, and Jorda


This note examines labor market performance across countries through the lens of Okun’s Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun’s Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labor market policies in response to the global demand shock.

The Future of U.S. Economic Growth

American Economic Review 104(5), May 2014, 44-49 | with Jones


Modern growth theory suggests that more than 3/4 of growth since 1950 reflects rising educational attainment and research intensity. As these transition dynamics fade, U.S. economic growth is likely to slow at some point. However, the rise of China, India, and other emerging economies may allow another few decades of rapid growth in world researchers. Finally, and more speculatively, the shape of the idea production function introduces a fundamental uncertainty into the future of growth. For example, the possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future.

Growth Accounting with Misallocation: Or, Doing Less with More in Singapore

American Economic Journal: Macroeconomics 3(2), April 2011, 29-74


We show that in a two-sector economy with heterogeneous capital subsidies and monopoly power, primal and dual measures of TFP growth can diverge from each other as well as from true technology. These distortions give rise to dynamic reallocation effects that imply technology growth needs to be measured from the bottom up rather than from the top down. Using Singapore as an example, we show how incomplete data can be used to estimate aggregate and sectoral technology growth as well as reallocation effects. Our framework can reconcile divergent TFP estimates in Singapore and can resolve other empirical puzzles regarding Asian development.

What Do We Know (and Not Know) about Potential Output?

FRB St Louis Review 91(4), July 2009, 187-213 | with Basu


Potential output is an important concept in economics. Policymakers often use a one-sector neoclassical model to think about long-run growth, and they often assume that potential output is a smooth series in the short run–approximated by a medium- or long-run estimate. But in both the short and the long run, the one-sector model falls short empirically, reflecting the importance of rapid technological change in producing investment goods; and few, if any, modern macroeconomic models would imply that, at business cycle frequencies, potential output is a smooth series. Discussing these points allows the authors to discuss a range of other issues that are less well understood and where further research could be valuable.

A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output

In Price Index Concepts and Measurement, 70, ed. by E. Diewert, J. Greenlees, and C. Hulten | Chicago: University of Chicago Press for NBER, 2009. 273-320 | with Basu and Wang


This paper addresses the proper measurement of financial service output that is not priced explicitly. It shows how to impute nominal service output from financial intermediaries’ interest income, and how to construct price indices for those financial services. We present an optimizing model with financial intermediaries that provide financial services to resolve asymmetric information between borrowers and lenders. We embed these intermediaries in a dynamic, stochastic, general-equilibrium model where assets are priced competitively according to their systematic risk, as in the standard consumption- capital- asset-pricing model. In this environment, we show that it is critical to take risk into account in order to measure financial output accurately. We also show that even using a risk-adjusted reference rate does not solve all the problems associated with measuring nominal financial service output. Our model allows us to address important outstanding questions in output and productivity measurement for financial firms, such as: (1) What are the correct “reference rates” one should use in calculating bank output? (2) If reference rates need to take account of risk, does this mean that they must be ex ante rates of return? (3) What is the right price deflator for the output of financial firms? Is it just the general price index? (4) When–if ever–should we count capital gains of financial firms as part of financial service output?

Trend Breaks, Long-Run Restrictions, and Contractionary Technology Improvements

Journal of Monetary Economics 54(8), November 2007, 2467-2485


Structural vector autoregressions with long-run restrictions are extraordinarily sensitive to low-frequency correlations. Recent literature finds that the estimated effects of technology shocks are sensitive to how one treats hours per capita. However, after allowing for (statistically and economically significant) trend breaks in productivity, results are much less sensitive: hours fall when technology improves. The issue is that the common high-low-high pattern of productivity growth and hours (i.e., the low-frequency correlation) inevitably leads to a positive estimated response. The trend breaks control for this correlation. This example suggests a practical need for care in using long-run restrictions.


Long-run-restrictions-online-appendices.pdf – Online appendices

Information and Communications Technology as a General-Purpose Technology: Evidence from U.S Industry Data

German Economic Review 8(2), May 2007, 146-173 | with Basu


Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a ‘general-purpose technology’ suggest that measured total factor productivity (TFP) should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital; spillovers; or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that U.S. industry results are consistent with general-purpose technology (GPT) stories: the acceleration after the mid-1990s was broad-based–located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.

Are Technology Improvements Contractionary?

American Economic Review 96(5), December 2006, 1418-1448 | with Basu and Kimball


Yes. We construct a measure of aggregate technology change, controlling for aggregation effects, varying utilization of capital and labor, nonconstant returns, and imperfect competition. On impact, when technology improves, input use and nonresidential investment fall sharply. Output changes little. With a lag of several years, inputs and investment return to normal and output rises strongly. The standard one-sector real-business-cycle model is not consistent with this evidence. The evidence is consistent, however, with simple sticky-price models, which predict the results we find: when technology improves, inputs and investment generally fall in the short run, and output itself may also fall.


BFK-Technology-Series.xls contains the main aggregate data series we constructed for the paper. It also contains industry technology estimates.
Industry_BFK_Data.xls – contains additional underlying industry data. These include growth rates for gross output, value added, primary inputs, total inputs, and hours per worker; and factor shares.

The Case of the Missing Productivity Growth: Or, Does Information Technology Explain Why Productivity Accelerated in the United States but Not the United Kingdom?

NBER Macroeconomics Annual, 2003 | with Basu, Oulton, and Srinivasan


We argue that unmeasured investments in intangible organizational capital associated with the role of information and communications technology (ICT) as a general purpose technology’ can explain the divergent U.S. and U.K. TFP performance after 1995. GPT stories suggest that measured TFP should rise in ICT-using sectors, perhaps with long lags. Contemporaneously, investments in ICT may in fact be associated with lower TFP as resources are diverted to reorganization and learning. In both the U.S. and U.K., we find a strong correlation between ICT use and industry TFP growth. The U.S. results, in particular, are consistent with GPT stories: the TFP acceleration was located primarily in ICT-using industries and is positively correlated with industry ICT capital growth from the 1980s and early 1990s. Indeed, as GPT stories suggest, controlling for past ICT growth, industry TFP growth appears negatively correlated with increases in ICT capital services in the late 1990s. A somewhat different picture emerges for the U.K. TFP growth does not appear correlated with lagged ICT capital growth. But TFP growth in the late 1990s is strongly and positively associated with the growth of ICT capital services, while being strongly and negatively associated with the growth of ICT investment.

Puzzles in the Chinese Stock Market

Review of Economics and Statistics, August 2002 | with Rogers

Aggregate Productivity and Aggregate Technology

European Economic Review, June 2002 | with Basu

Productivity Growth in the 1990s: Technology, Utilization, or Adjustment?

Carnegie-Rochester Series on Public Policy, December 2001 | with Basu and Shapiro

Was China the First Domino? Assessing the Links between China and the Rest of Emerging Asia

Journal of International Money and Finance, August 1999 | with Edison and Loungani


Fernald-et-al-China-official-and-swap-exchange-rates-pre-1994.xls – Nominal Exchange Rates RMB/US$ and Chinese Inflation

Roads to Prosperity? Assessing the Link between Public Capital and Productivity

American Economic Review, June 1999, 619-638

Returns to Scale in U.S. Manufacturing: Estimates and Implications

Journal of Political Economy, April 1997 | with Basu

Are Apparent Productive Spillovers a Figment of Specification Error?

Journal of Monetary Economics, August 1995 | with Basu

FRBSF Publications
Does Working from Home Boost Productivity Growth?

Economic Letter 2024-02 | January 16, 2024 | with Goode, Li, and Meisenbacher

Labor Productivity in a Pandemic

Economic Letter 2021-22 | August 16, 2021 | with Li and Ochse

Future Output Loss from COVID-Induced School Closures

Economic Letter 2021-04 | February 16, 2021 | with Li and Ochse

Assessing the Accuracy of China’s Economic Rebound from COVID-19

SF Fed Blog | 2020 | with Beauregard and Spiegel

How Severe Is China’s Slowdown? Evidence from China CAT

Economic Letter 2019-26 | October 7, 2019 | with Gerstein and Spiegel

Is Slow Still the New Normal for GDP Growth?

Economic Letter 2019-17 | June 24, 2019 | with Li

The Disappointing Recovery in U.S. Output after 2009

Economic Letter 2018-04 | February 12, 2018 | with Hall, Stock, and Watson

Has the Dollar Become More Sensitive to Interest Rates?

Economic Letter 2017-18 | June 26, 2017 | with Mertens and Shultz

Does Growing Mismeasurement Explain Disappointing Growth?

Economic Letter 2017-04 | February 13, 2017 | with Byrne and Reinsdorf

What Is the New Normal for U.S. Growth?

Economic Letter 2016-30 | October 11, 2016

The Recent Rise and Fall of Rapid Productivity Growth

Economic Letter 2015-04 | February 9, 2015 | with Wang

Has China’s Economy Become More “Standard”?

Economic Letter 2014-30 | October 6, 2014 | with Hsu and Spiegel

Interpreting Deviations from Okun’s Law

Economic Letter 2014-12 | April 21, 2014 | with Daly, Jorda, and Nechio

Labor Markets in the Global Financial Crisis

Economic Letter 2013-38 | December 23, 2013 | with Daly, Jorda, and Nechio

On the Reliability of Chinese Output Figures

Economic Letter 2013-08 | March 25, 2013 | with Malkin and Spiegel

What Is the Value of Bank Output?

Economic Letter 2011-15 | May 16, 2011 | with Alon, Inklaar, and Wang

Growth Accounting, Potential Output, and the Current Recession

Economic Letter 2009-26 | August 17, 2009 | with Matoba

Information and Communications Technology as a General Purpose Technology: Evidence from U.S. Industry Data

Economic Review | 2008 | with Basu

Will Fast Productivity Growth Persist?

Economic Letter 2007-09 | April 6, 2007 | with Thipphavong and Trehan

Financial Innovations and the Real Economy: Conference Summary

Economic Letter 2007-05 | March 2, 2007 | with Doms and Lopez

Is a Recession Imminent?

Economic Letter 2006-32 | November 24, 2006 | with Trehan

Shifting Data: A Challenge for Monetary Policymakers

Economic Letter 2005-35 | December 9, 2005 | with Wang

Why Hasn’t the Jump in Oil Prices Led to a Recession?

Economic Letter 2005-31 | November 18, 2005 | with Trehan

Other Works
Discussion of Acemoglu, Autor, and Patteson

Forthcoming in NBER Macroeconomics Annual 2023, ed. by Ramey, Eichenbaum, and Hurst

The Impact of COVID on Productivity and Potential Output

Forthcoming in Jackson Hole Symposium Volume | with Li


The level of potential output is likely to be subdued post-COVID relative to its previous estimates. Most clearly, capital input and full-employment labor will both be lower than they previously were. Quantitatively, however, these effects appear relatively modest. In the long run, labor scarring could lead to lower levels of employment, but the slow pre-recession pace of GDP growth is unlikely to be substantially affected.

Dale Jorgenson: Investment, Growth Accounting, and Economic Measurement

VoxEU, June 2022 | with Inklaar and van Ark


Dale Jorgenson, who passed away in June 2022, was a central contributor to a wide range of economic and policy issues over a long and productive career. This column, written by three of his friends and colleagues, outlines some of his most notable intellectual contributions, including changing how economists think about investment, implementing better ways to measure productivity, and pushing national accountants to update how they measure economies around the world. The authors note that a characteristic of his work was a tight integration of economic theory, appropriate data that matches the theory, and sound econometrics.

Cyclical Downturn or Slowing Trend? A Review Article on Productivity Puzzles across Europe

International Productivity Monitor, Spring 2018

The Disappointing Recovery of Output after 2009

Brookings Papers on Economic Activity, August 2017

Paradox Resolved? A Review of Gordon

Business Economics, August 2017

Is There an Easy Cure for Low Growth?

Business Economics 52(3), July 2017, 175-180


The U.S. economy faces sizeable headwinds to keeping GDP growth even at 2% over the next decade. Demographics imply that labor force growth will be much slower than historical norms. The enormous twentieth century increase in average educational attainment is unlikely to be repeated. And the best guess for productivity growth is that it will continue to be modest—perhaps along the lines seen in the 1970s to early 1990s, or since 2004. There are no easy cures for low growth. We can hope for another wave of broadbased IT-linked innovation. But while there is enormous uncertainty, even worthwhile policy steps are unlikely to move the dial very much on their own.

Does the United States Have a Productivity Slowdown or a Measurement Problem?

Brookings Papers on Economic Activity, June 2016 | with Byrne and Reinsdorf


After 2004, measured growth in labor productivity and total factor productivity (TFP) slowed. We find little evidence that the slowdown arises from growing mismeasurement of the gains from innovation in information-technology (IT)-related goods and services. First, mismeasurement of IT hardware is significant prior to the slowdown and because the domestic production of these products has fallen, the quantitative effect on productivity is larger in the 1995-2004 period than since, despite mismeasurement worsening for some types of IT. Hence, our adjustments make the slowdown in labor productivity worse. The effect on TFP is more muted. Second, many of the tremendous consumer benefits from smartphones, Google searches, and Facebook are, conceptually, non-market: Consumers are more productive in using their nonmarket time to produce services they value. These benefits raise consumer well-being but do not imply that market-sector production functions are shifting out more rapidly than measured. Moreover, estimated gains in non-market production are too small to compensate for the loss in overall well-being from slower market-sector productivity growth. In addition to IT, other measurement issues we can quantify (such as increasing globalization and fracking) are also quantitatively small relative to the slowdown.

Comrades or Competitors? On Trade Relationships between China and Emerging Asia

Chicago Fed Letter 200, March 2004


What are the implications of China’s economic growth for its neighboring economies? Do the mutual benefits outweigh the costs of intensifying competition in emerging Asia? Recent research on trade between Asia and the U.S., as well as among the Asian economies, highlights the changing nature of these relationships and the attendant costs and benefits for all parties.

The Acceleration in U.S. Total Factor Productivity after 1995: The Role of Information Technology

FRB Chicago Economic Perspectives 28(1), Q1 2004, 52-66 | with Ramnath


After the mid-1990s, labor and total factor productivity (TFP) accelerated in the United States. A growing body of research has explored the robustness of the U.S. acceleration, generally concluding that it reflects an underlying technology acceleration. This research, along with considerable anecdotal and microeconomic evidence, suggests a substantial role for information and communications technology (ICT).
In this article, we briefly discuss the results of socalled growth accounting at the aggregate level. We then look more closely at the experience since the mid- 1990s, when TFP accelerated. We look at data on which industries account for the TFP acceleration: Were the 1990s a time of rising total factor productivity growth outside of the production of ICT? Our industry data strongly support the view that a majority of the TFP acceleration reflects an acceleration outside of the production of ICT goods and software.2 Even when we focus on arguably “well-measured” sectors (Griliches 1994; Nordhaus 2002), we find a substantial TFP acceleration outside of ICT production.

China and Emerging Asia: Comrades or Competitors?

In The Post-Crisis Macroeconomic Adjustment in Asia. Proceedings from a conference hosted by the Seoul Journal of Economics, 2003 | with Ahearne, Loungani, and Schindler


This is the first paper to empirically examine whether a country’s use of an import restricting trade policy distorts a foreign country’s exports to third markets. We first develop a theoretical model of worldwide trade in which the imposition of antidumping and safeguard tariffs, or “trade remedies,” by one country causes significant distortions in world trade flows. We then empirically test this model by investigating the effect of the United States’ use of such import restrictions on Japanese exports of roughly 4800 products into 37 countries between 1992 and 2001. Our estimation yields evidence that US restrictions both deflect and depress Japanese export flows to third countries. Imposition of a US antidumping measure against Japan deflects trade, as the average antidumping duty on Japanese exports leads to a 5-7% increase in Japanese exports of the same product to the average third country market. The imposition of a US antidumping measure against a third country depresses trade, as the average US duty imposed on a third country leads to a 5-19% decrease in Japanese exports of that same product to the average third country’s market. We also document the substantial variation in trade deflection and trade depression across different importing countries and exported products.

Information Technology and the U.S. Productivity Acceleration

Chicago Fed Letter 193, September 2003


Whatever happened to the New Economy? The good news is U.S. productivity continues to grow at a healthy pace. This article sheds light on why information and communications technology may continue to pay dividends for years to come.

A Discussion of Productivity Growth and Technology

In Technology, Growth, and the Labor Market, ed. by Ginther and Zavodny | Netherlands: Kluwer Academic Publishers, 2002

Countering Contagion: Does China’s Experience Offer a Blueprint?

FRB Chicago Economic Perspectives 25(4), Fall 2001, 38-52 | with Ahearne and Loungani


China did not succumb to the Asian crisis of 1997-99, despite two apparent sources of vulnerability: a weak financial system and increased export competition from the Asian crisis economies. This article argues that both sources of vulnerability were more apparent than real. China’s experience (especially its use of capital controls) does not offer a blueprint for other countries, because other countries would not want to replicate China’s inefficient, non-market-oriented financial system.

The Fall and Rise of the Global Economy

Chicago Fed Letter 164, April 2001 | with Greenfield


Anyone who follows the news, even casually, or reads product labels, is aware that the world economy has become more interdependent in recent decades. Indeed, the worldwide integration of national economies–through goods and services trade, capital flows and operational linkages among firms–has never before been as broad or as deep.

Why Is Productivity Procyclical? Why Do We Care?

In New Directions in Productivity Analysis. Studies in Income and Wealth Vol. 63, ed. by Dean, Harper, and Hulten | Chicago: University of Chicago Press, 2001 | with Basu

Growth, Reform, and the Effects of the Asian Crisis on China

China Business Review, September 1999

Why Has China Survived the Asian Crisis So Well? What Risks Remain?

In Financial Market Reform in China: Progress, Problems, and Prospects, ed. by Chen, Dietrich, and Feng | Westview Press, 1999 | with Babson