Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies
Frequently, factors other than structural developments in technology and production efficiency drive changes in labor productivity in advanced and emerging market and developing economies (EMDEs). This paper uses a new method to extract technology...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/499561611604841870/Technology-and-Demand-Drivers-of-Productivity-Dynamics-in-Developed-and-Emerging-Market-Economies http://hdl.handle.net/10986/35072 |
| id |
okr-10986-35072 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-350722022-09-20T00:10:57Z Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies Dieppe, Alistair Francis, Neville Kindberg-Hanlon, Gene PRODUCTIVITY DYNAMICS EMERGING MARKET ECONOMIES DEMAND DRIVER TECHNOLOGY LABOR PRODUCTIVITY BUSINESS CYCLE ADVANCED ECONOMIES DEVELOPING ECONOMIES TECHNOLOGY DIFFUSION Frequently, factors other than structural developments in technology and production efficiency drive changes in labor productivity in advanced and emerging market and developing economies (EMDEs). This paper uses a new method to extract technology shocks that excludes these influences, resulting in lasting improvements in labor productivity. The same methodology in turn is used to identify a stylized example of the effects of a demand shock on productivity. Technology innovations are accompanied by higher and more rapidly increasing rates of investment in EMDEs relative to advanced economies, suggesting that positive technological developments are often capital-embodied in the former economies. Employment falls in both advanced economies and EMDEs following positive technology developments, with the effect smaller but more persistent in EMDEs. Uncorrelated technological developments across economies suggest that global synchronization of labor productivity growth is due to cyclical (demand) influences. Demand drivers of labor productivity are found to have highly persistent effects in EMDEs and some advanced economies. Unlike technology shocks, however, demand shocks influence labor productivity only through the capital deepening channel, particularly in economies with low capacity for counter-cyclical fiscal policy. Overall, non-technological factors accounted for most of the fall in labor productivity growth during 2007-08 and around one-third of the longer-term productivity decline after the global financial crisis. 2021-01-28T15:46:41Z 2021-01-28T15:46:41Z 2021-01 Working Paper http://documents.worldbank.org/curated/en/499561611604841870/Technology-and-Demand-Drivers-of-Productivity-Dynamics-in-Developed-and-Emerging-Market-Economies http://hdl.handle.net/10986/35072 English Policy Research Working Paper;No. 9525 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
PRODUCTIVITY DYNAMICS EMERGING MARKET ECONOMIES DEMAND DRIVER TECHNOLOGY LABOR PRODUCTIVITY BUSINESS CYCLE ADVANCED ECONOMIES DEVELOPING ECONOMIES TECHNOLOGY DIFFUSION |
| spellingShingle |
PRODUCTIVITY DYNAMICS EMERGING MARKET ECONOMIES DEMAND DRIVER TECHNOLOGY LABOR PRODUCTIVITY BUSINESS CYCLE ADVANCED ECONOMIES DEVELOPING ECONOMIES TECHNOLOGY DIFFUSION Dieppe, Alistair Francis, Neville Kindberg-Hanlon, Gene Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| relation |
Policy Research Working Paper;No. 9525 |
| description |
Frequently, factors other than
structural developments in technology and production
efficiency drive changes in labor productivity in advanced
and emerging market and developing economies (EMDEs). This
paper uses a new method to extract technology shocks that
excludes these influences, resulting in lasting improvements
in labor productivity. The same methodology in turn is used
to identify a stylized example of the effects of a demand
shock on productivity. Technology innovations are
accompanied by higher and more rapidly increasing rates of
investment in EMDEs relative to advanced economies,
suggesting that positive technological developments are
often capital-embodied in the former economies. Employment
falls in both advanced economies and EMDEs following
positive technology developments, with the effect smaller
but more persistent in EMDEs. Uncorrelated technological
developments across economies suggest that global
synchronization of labor productivity growth is due to
cyclical (demand) influences. Demand drivers of labor
productivity are found to have highly persistent effects in
EMDEs and some advanced economies. Unlike technology shocks,
however, demand shocks influence labor productivity only
through the capital deepening channel, particularly in
economies with low capacity for counter-cyclical fiscal
policy. Overall, non-technological factors accounted for
most of the fall in labor productivity growth during 2007-08
and around one-third of the longer-term productivity decline
after the global financial crisis. |
| format |
Working Paper |
| author |
Dieppe, Alistair Francis, Neville Kindberg-Hanlon, Gene |
| author_facet |
Dieppe, Alistair Francis, Neville Kindberg-Hanlon, Gene |
| author_sort |
Dieppe, Alistair |
| title |
Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| title_short |
Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| title_full |
Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| title_fullStr |
Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| title_full_unstemmed |
Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies |
| title_sort |
technology and demand drivers of productivity dynamics in developed and emerging market economies |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/499561611604841870/Technology-and-Demand-Drivers-of-Productivity-Dynamics-in-Developed-and-Emerging-Market-Economies http://hdl.handle.net/10986/35072 |
| _version_ |
1764482261709750272 |