Over the last few weeks we have been writing about the recent trends in productivity growth largely from a micro perspective, showing that despite very low aggregate productivity growth, there are at least some leading frontier companies that are experiencing very high rates of productivity growth; unfortunately, however, there also seems to be very little diffusion taking place to those nonfrontier companies, or the laggards. In this week’s Economics Weekly, we continue with the productivity theme, but from a more macro level, highlighting the various explanations for its recent weakness, as well as a number of reasons it might foreseeably be starting to improve from here. In part III next week, we will stress just how crucially important the behaviour of productivity is for the economy, and, as a result, for financial markets.
For a copy of this report or to subscribe to the Economics Weekly or Economic Indicators reports, please contact your William Blair representative.
Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.