Estimates of the Productivity Trend Using Time-Varying Parameter Techniques

42 Pages Posted: 23 Feb 2001

See all articles by John M. Roberts

John M. Roberts

Board of Governors of the Federal Reserve System

Date Written: November 2000

Abstract

In the second half of the 1990s, U.S. productivity growth moved up to rates not seen in several decades. In this paper, I use time-varying parameter techniques to isolate trend from cyclical movements in productivity and to obtain an estimate of the trend rate of productivity growth. I examine models both with and without an explicit role for capital accumulation. I find that in the models without an explicit role for capital accumulation, trend productivity growth is estimated to have moved up from around 1-1/2 percent in the period from the early 1970s to the mid 1990s, to about 2-1/2 percent by the final observation used in this paper, the second quarter of 2000. I find that if I allow for an explicit role for capital accumulation, the recent pace of trend productivity growth is even higher, at around 3 percent.

Keywords: Growth, productivity, new economy, time-varying parameter techniques

Suggested Citation

Roberts, John M., Estimates of the Productivity Trend Using Time-Varying Parameter Techniques (November 2000). Available at SSRN: https://ssrn.com/abstract=261319 or http://dx.doi.org/10.2139/ssrn.261319

John M. Roberts (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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