The study noted that imposing high minimum wages without productivity growth
appears inefficient, and has unintended adverse effects on the whole.
Labour productivity growth
was strongest in the primary industries, which were up 2.7 percent in the year ended March 2018, while service industries were up 0.5 percent for the year.
The puzzle of slower productivity growth
in advanced economies in a period of rapid technological change has intrigued many researchers.
At frontier firms, productivity growth
has not declined, which raises the question of why those advances are not spilling over to other companies.
The OBR said: "Productivity growth
since November - measured as output per hour - has been much stronger than expected.
The study theoretically linked exchange rate volatility to aggregate productivity growth
and concluded a negative relationship among exchange rate volatility and aggregate productivity growth
, especially in the countries where the financial market is under-developed.
Because the two world wars and the Great Depression dominate the early part of my sample, I also study the long-run correlation of real interest rates and productivity growth
from 1948 to 2016.
Mason, the author of the report, argues that soft productivity growth
reflects not some unlucky dearth of new innovations, but rather is a consequence of depressed demand for goods and services and a slack labour market that has depressed wages.
In a 300-page report, the OBR said: "The expected return of productivity growth
toward historical norms is the most important uncertainty in our forecast.
After the adjustments, productivity growth
is unchanged prior to the 1990s, 0.1 percent higher annually from 1994 to 2004, 0.25 percent higher each year from 2004 to 2008, and unchanged after 2008.
Annual labor productivity growth
can be viewed as the sum of three components: multifactor productivity growth
, the contribution of capital intensity, and the contribution of shifts in labor composition.
In this study, I investigate productivity growth--specifically, the so-called "mismeasurement hypothesis." This is the notion that even though measured productivity growth
has slowed considerably over the last decade or so, the true productivity growth
has actually continued apace.