Comments on Maverecon - Willem Buiter's Blog: US Productivity Growth

So what does there look like? What are some of the...

2007-08-21T19:17:00.000+01:00

So what does there look like? What are some of the changes needing to be done?

Just started reading your blog. Looks great!

1. There was an increase in labor force participat...

2007-08-12T11:51:00.000+01:00

1. There was an increase in labor force participation rate from 60% in 1971 to 67% in 1990 - figure 1 in
http://inflationusa.blogspot.com/2007/07/forecasting-unemployment-rate-in-usa.html .
By all means, this fresh workforce was not able to provide an adequate productivity growth. However, personal income distributuion, as measured by the US Census Bureau,
http://inequalityusa.blogspot.com
did not change during these years, as also since 1947.

The period of high productivity growth was associated with constant (and high) labor force PR between 1990 and 2001.

Since 2001, the PR has been declining. This does not bring higher productivity because of relatively low inflow of younger workers, who provide the largest anual steps in income and real GDP per capita, i.e. provide higher productivity growth.

The US Bureau of Labor Statistics methodology for ...

2007-08-10T19:41:00.000+01:00

The US Bureau of Labor Statistics methodology for estimating employment includes adjustments based on historical models.

Recent BLS estimates, which show rising construction employment in an environment which suggests otherwise, have exposed BLS algorithms to challenges, particularly as these estimates - if incorrect - distort the calculation of productivity.

Your point, while well-taken, may well rest on BLS distortions extending back several decades. I'll posit that models reflecting robust economies are inappropriate at inflection points and in the years immediately following.