Productivity: What is it, and Why Do We Care About it?

42 Pages Posted: 9 Aug 2006

See all articles by Charles Steindel

Charles Steindel

Federal Reserve Bank of New York

Kevin J. Stiroh

Federal Reserve Bank of New York

Date Written: April 2001

Abstract

Economists, business analysts, and policymakers have all focused considerable attention on U.S. productivity growth in recent years. This paper presents a broad overview of productivity¬óboth labor and total factor¬óand discusses why it is such an important topic. We begin with the official U.S. productivity statistics prepared by the U.S. Bureau of Labor Statistics and discuss several stylized facts. We show how productivity relates to critically important variables like long-run growth, living standards, and inflation. We then describe the proximate factors that determine labor productivity using a standard growth accounting framework. Finally, we outline a series of unresolved productivity issues that have direct implications for the future of the U.S. economy.

Keywords: productivity, labor productivity

JEL Classification: O4, O3

Suggested Citation

Steindel, Charles and Stiroh, Kevin J., Productivity: What is it, and Why Do We Care About it? (April 2001). FRB of New York Staff Report No. 122. Available at SSRN: https://ssrn.com/abstract=923421 or http://dx.doi.org/10.2139/ssrn.923421

Charles Steindel (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Kevin J. Stiroh

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
(212) 720-6633 (Phone)
(212) 720-8363 (Fax)

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