When ˙rms engage in strategic behavior, market leaders have a stronger investment response to lower interest rates relative to followers, and this stronger investment response leads to more market concentration and eventually lower productivity growth. Conference organizers Jeromin Zettelmeyer and Adam S. The simplest productivity … Low productivity growth would have impor-tant ramifications for our ability to sustain high standards of living.But it would not affect our ability to trade with other countries. Productivity growth has slowed in the United States in the past decade, and some analysts expect growth to remain low in coming years. 29/04/2019 - Employment is rising in OECD countries but most jobs continue to be created in relatively low-productivity, low-wage activities, says a new OECD report. Measured productivity growth in the health care industry has generally been well below that of the economy as a whole. And, not just in the US, where the figure has remained below 1% in recent years(! Estimates suggest that the United States has been in the low-growth regime since 2004. Assuming this low growth continues, productivity growth in the year 2025 would be 0.6%. By dropping this assumption and allowing for a switch to consistent higher growth, an alternative estimate … About the Author Jeromin Zettelmeyer has been a senior fellow at the Peterson Institute for International Economics since September 2016 and was a nonresident senior fellow during 2013–14. Book your free customized trial today. Many analysts attribute this low productivity growth to measurement problems. Low productivity jobs continue to drive employment growth: Labour productivity growth GDP per hour worked, percentage rate at annual rate. What’s scary is that we don’t know why. Productivity is the most important determinant of the growth in living standards over the long run and its growth has been weak since 2004 and dismal since 2010. #3. See how intuitive and effective our resource management solution is by booking in a free, custom-configured trial. Facing Up to Low Productivity Growth also proposes ways that countries can cope with these consequences. reduces aggregate investment in productivity growth at very low interest rates. ), but also in France and the UK. The Mystery of Declining Productivity Growth The healthy 2.6% a year from 1995-2010 has since been an anemic 0.4%. Productivity growth shows evidence of switching between long periods of high and low average growth. How does low productivity impact the business? This is rather puzzling because low-skill workers tend to work in sectors that have higher productivity growth, yet their wages are lagging behind those of high-skill workers and aggregate labour productivity. 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