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Neutral, Investment-Specific Technical Progress and the Productivity Slowdown

Published online by Cambridge University Press:  17 August 2016

Fernando del Rio Iglesias
Fernando del Rio Iglesias*
Affiliation:
Universidad de Santiago de Compostela
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Summary

In this article I show that a permanent possitive shock on the rate of investment-specific technical progress might cause, at least in the short run, a fall of the growth rate of both output per capita and total factor productivity, as measured by the Solow residual. Several simulations are performed which show that the extent of the Productivity Slowdown drastically depends on the elasticity of the marginal cost of producing a unit of capital good with respect to the rate of investment-specific technical progress.

Résumé

Résumé

Dans cet article, je montre qu’un choc positif permanent sur le taux de progrès technique spécifique à l’investissement peut provoquer, au moins à court terme, une chute du taux de croissance à la fois du produit par tête et de la productivité totale des facteurs, telle qu’elle est mesurée par le résiduel de Solow. Nous réalisons une série de simulations qui montre que l’amplitude du Ralentissement de la Productivité dépend énormément de l’élasticité du coût marginal de production d’une unité de bien capital relativement au taux de progrès technique spécifique à l’investissement.

Keywords

Neutral and Investment-Specific Technical ProgressTotal Factor ProductivityProductivity SlowdownO30O40O30O40
Type
I. Macroeconomics and National Accounting
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 68 , Special Issue 1-2: The New Economy: Implications and Viability , 2002 , pp. 37 - 54
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2002 

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Footnotes

*

I am indebted to Antonio Rodriguez-Sampaio and Mikel Pérez-Nievas for their help.

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