101. COMMENT ON THE PAPER BY PROFESSOR LINDBECK.
- Author
-
Morris, Derek J.
- Subjects
LABOR productivity ,INDUSTRIAL productivity ,PRODUCTION (Economic theory) ,PRICE inflation ,LABOR economics ,DEVELOPED countries - Abstract
This article comments on a paper by professor Assar Lindbeck on the slowdown of productivity growth in industrialized western nations. Lindbeck's paper adopts a broad and ambitious target. It is partly, though not entirely, in the growth-accounting mould, and presents a reasonably exhaustive quantitative breakdown of the causes of the slowdown.The longer term factors in Lindbeck's paper were also discussed inthearticle.Firstishigher inflation, causing more uncertainty, tax distortions and demand restraint as a result of anti-inflation policies.Second is thedeclining profitability, resulting from increased international competition, and causing lower growth and lower investment.Andthirdis the tendency to factor immobility, resource misallocation and inflation, as a result of private agents' recognition of government's commitment to full employment. There is also a link between capital-labour substitution and capital productivity growth. For there are indications that the latter has also declined, perhaps further than labour productivity growth, though given the measurement problems it is difficult to say. But if it has done so, then the question of causality becomes even more confused. The slowdown in productivity growth can itself be the unexplained exogenous variable which then slows the rate of capital-labour substitution.
- Published
- 1983
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