A Bourse Diary

Thoughts on stocks, speculation and ... life

Thursday, February 15, 2007

An interesting study on productivity

The Federal Reserve Bank of New York publishes a new study on tracking and evaluating of productivity trends in the economy.

In the summery of the research is stated:
Authors James Kahn and Robert Rich conclude that long-run productivity growth, also known as trend productivity growth, continues to be nearly 3 percent per year, based on a new model designed to track underlying national productivity trends.

Kahn and Rich developed their model to facilitate more timely and accurate assessments of evolving productivity trends. These trends have important implications for living standards and the nation’s overall economy, and hence for the decisions of economic policymakers.

According to the authors, their model identifies changes in productivity trends within a year or two of their onset. They observe that the model would have been especially revealing as productivity began to increase in 1996 in an early manifestation of what became known as the "new economy."

Kahn and Rich also conclude that their model, had it been in use, would have given clear indications to policymakers that despite cyclical moves in data linked to the nation’s 2001 recession, long-run productivity growth was unaffected during that period.

The authors’ model incorporates additional labor market and consumer spending data to help screen out transitory movements in productivity related to business cycle conditions.

James A. Kahn is a vice president and Robert W. Rich a research officer in the Macroeconomic and Monetary Studies Function of the Research and Statstics Group.

Tracking Productivity in Real Time


Post a Comment

<< Home

Disclaimer: All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and are in no way intended to serve as personal investing advice and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Readers should not make any investment decision without first conducting their own thorough due diligence. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. While the information provided is obtained from sources believed to be reliable, its accuracy or completeness cannot be guaranteed.