What's Top of Mind?: 'The Productivity Paradox'

Published on06 NOV 2015

In the last 10 years, technological innovation has continued at a rapid pace while US productivity growth has slowed to historically low rates, leading to an essential question: Are we measuring productivity properly? The answer has important implications for businesses, policymakers and individual workers, as productivity growth influences corporate profitability, international competitiveness and wages. 

The economy just isn't behaving as if there had been a big productivity slowdown. Inflation is low, profit shares are high, the stock market’s doing well, the technology sector’s outperforming, and yet the data, taken at face value, suggests that we’ve seen a big technology-centered slowdown in productivity growth.

- Jan Hatzius

Jan Hatzius
Chief Economist and Head of Global Economics and Markets Research, Global Investment Research, Goldman Sachs
Allison Nathan
Senior Strategist, Global Investment Research, Goldman Sachs

In this video, Jan Hatzius, chief economist in Global Investment Research (GIR) at Goldman Sachs, and Allison Nathan, senior strategist in GIR, explain why US productivity may be better than the numbers suggest and what that could mean for the economy.

In this edition of 'Top of Mind' from GIR, editor Allison Nathan speaks with “techno-optimist” Joel Mokyr and “techno-pessimist” Robert Gordon, both of Northwestern University, on whether technological innovation is accurately accounted for in current economic data. In addition, Goldman Sachs equity research analyst Joe Ritchie writes on the potential for the Internet of Things to transform industrial business models and boost productivity, and commodities strategist Christian Lelong examines sources for sustained productivity growth in energy and mining.