The Industry Anatomy of the Transatlantic Productivity Growth Slowdown: Europe Chasing the American Frontier

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Abstract

Using EU KLEMS (2012 and 2017 vintages linked via ratio linking) for EU-10 countries and U.S. BLS data, this article provides a detailed industry-level comparison of productivity growth slowdowns on both sides of the Atlantic. The key finding is that EU-10 total economy labour productivity slowed by 1.68 percentage points between 1972-1995 and 2005-2015 — virtually identical to the U.S. slowdown of 1.67 points between 1950-1972 and 2005-2015 — with a 20-year lag. The same industries were affected by the same magnitude on both sides of the Atlantic, supporting the view that the slowdown reflects a slowing pace of technical change rather than country-specific factors.

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