Hostname: page-component-78c5997874-94fs2 Total loading time: 0 Render date: 2024-11-05T10:58:16.156Z Has data issue: false hasContentIssue false
  • English
  • Français

Productivity and Convergence in the EU

Published online by Cambridge University Press:  26 March 2020

Mary O'Mahony
Mary O'Mahony*
Affiliation:
National Institute of Economic and Social Research
*
e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

For most of the postwar period both labour and total factor productivity growth in the EU was higher than in the US. The 1990s witnessed a change in this trend with the US experiencing higher growth rates for the first time in decades. This was partly due to the end of catch-up growth as many larger EU Member States had reached US levels by the beginning of the decade with also some evidence of a higher ‘New Economy’ impact in the US. The productivity record of the UK was poor relative to its major European competitors throughout most of the postwar period, although this relative decline appears to have come to an end. This paper presents figures on relative productivity for the total EU and individual Member States in the 1990s. Both postwar convergence and trends in the 1990s are discussed in terms of a number of factors which result in the emergence of differences across European countries. These include the skill composition of the workforce, the rate of introduction of new technology and the institutional environment in which firms operate. The latter include the stability of the macroeconomic environment and aspects of competition and regulation. The paper concludes that trends in productivity largely reflect long-term structural aspects but that EMU membership might have a small favourable effect on UK productivity.

Type
Articles
Information
National Institute Economic Review , Volume 180 , April 2002 , pp. 72 - 82
Copyright
Copyright © 2002 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abramovitz, M. (1986), ‘Catching up, forging ahead and falling behind’, Journal of Economic History, 46, pp. 385–406.CrossRefGoogle Scholar
Aghion, P. and Howitt, P. (1998), Endogenous Growth Theory, Cambridge MA, MIT Press.Google Scholar
Barrell, R. (2002), ‘The UK and EMU: choosing the regime’, National Institute Economic Review, 180, April.CrossRefGoogle Scholar
Baumol, W.J. (1986), ‘Productivity growth, convergence and welfare: what the long run data show’, American Economic Review, 76, pp. 1072–1159.Google Scholar
Ben-David, D. (1993), ‘Equalizing exchange: trade liberalisation and income convergence’, Quarterly Journal of Economics, 108, pp. 653–679.CrossRefGoogle Scholar
Blundell, R., Griffith, R. and Van Reenen, J. (1999), ‘Market value, market share and innovation in a panel of British manufacturing firms’, Review of Economic Studies, 66, pp. 529–554.CrossRefGoogle Scholar
Broadberry, S. (1997), The Productivity Race: British Manufacturing in International Perspective, 1850-1990, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
Broadberry, S.N. and Crafts, N.F.R. (1996), ‘British economic policy and performance in the early post-war period’, Business History, 38, pp. 65–91.CrossRefGoogle Scholar
Broadberry, S.N. and Crafts, N.F.R. (1998), ‘The post-war settlement: not such a good bargain after all’, Business History, 40, pp. 73–79.CrossRefGoogle Scholar
Cette, G., Mairesse, J. and Kocoglu, Y. (2002), ‘Croissance économique et diffusion des TIC: le cas de la France sur longue période (1980-2000)’, Revue Française d’Économie, 16, 1, pp. 155-92.CrossRefGoogle Scholar
Colecchia, A. and Schreyer, P. (2001), ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? Paris, OECD.Google Scholar
Crafts, N. (2001), ‘Supply side policies and British relative economic decline’, in Economic Growth and Government Policy, London, HMTreasury, April.Google Scholar
Crafts, N. and O'Mahony, M. (2001), ‘A perspective on UK productivity performance’, Fiscal Studies, 22, 3, pp. 271–306.CrossRefGoogle Scholar
Crafts, N. and Toniolo, G. (1996), ‘Postwar growth: an overview’, in Crafts, N. and Toniolo, G. (Eds), Economic Growth In Europe since 1945, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
Eichengreen, B. (1996), ‘Institutions and economic growth: Europe after World War II’, in Crafts, N. and Toniolo, G. (Eds), Economic Growth in Europe since 1945, Cambridge, Cambridge University Press, pp. 38–72.CrossRefGoogle Scholar
Gordon, R. (2000), ‘Does the “New Economy” measure up to the great inventions of the past?’, Journal of Economic Perspectives, 14, 4, pp. 49–74.CrossRefGoogle Scholar
Grossman, G.M. and Helpman, E. (1991), Innovation and Growth in the Global Economy, Cambridge MA, MIT Press.Google Scholar
HM Treasury (2002), Realising Europe's Potential: Economic Reform in Europe, London, HM Treasury, February.Google Scholar
Jorgenson, D.W. (1989), ‘Capital as a factor of production’, in Jorgenson, D.W. and Landau, R. (Eds), Technology and Capital Formation, Cambridge MA, MIT Press.Google Scholar
Jorgenson, D.W. and Stiroh, K. (2000), ‘Raising the speed limit: US economic growth in the information age’, Brookings Papers on Economic Activity, 1, pp. 125–211.CrossRefGoogle Scholar
Machin, S. and Van Reenen, J. (1998), ‘Technology and changes in skill structure: evidence from an international panel of industries’, Quarterly Journal of Economics, 113, 4, pp. 1215–1244.CrossRefGoogle Scholar
Maddison, A. (1982), Phases of Capitalist Development, Oxford, Oxford University Press.Google Scholar
Matthews, R.C.O., Feinstein, C.H. and Odling-Smee, J.C. (1982), British Economic Growth, 1856-1973, Oxford, Oxford University Press.CrossRefGoogle Scholar
Nickell, S.J. (1996), ‘Competition and corporate performance’, Journal of Political Economy, 104, pp. 724–746.CrossRefGoogle Scholar
Nickell, S. and Van Reenen, J. (2001), ‘Technological innovation and economic performance in the United Kingdom’, Centre for Economic Performance, Discussion Paper no. 488, January.Google Scholar
OECD (1996), OECD Economic Surveys: United Kingdom, Paris, OECD.Google Scholar
Oliner, S. and Sichel, D. (2000), ‘The resurgence of growth in the late 1990s: is information technology the story?’, Journal of Economic Perspectives, 14, 4, pp. 3–22.CrossRefGoogle Scholar
O'Mahony, M. (1999), Britain's Productivity Performance, 1950-1996: An International Perspective, London, National Institute of Economic and Social Research.Google Scholar
O'Mahony, M. (2002), ‘Productivity in the EU, 1979-99. London, HM Treasury.Google Scholar
O'Mahony, M. and de Boer, W. (2002), ‘Britain's relative productivity performance: updates to 1999’, Final Report to DTI/Treasury/ONS, London, NIESR (available on www.niesr.ac.uk).Google Scholar
Oulton, N. (1995), ‘Supply side reform and UK economic growth: what happened to the miracle?’, National Institute Economic Review, 154, pp. 53–68.CrossRefGoogle Scholar
Oulton, N. (2001), ‘ICT and productivity growth in the United Kingdom’, Bank of England Working Paper no.140.Google Scholar
Prais, S.J. (1995), Productivity, Education and Training - An International Perspective, Cambridge, Cambridge University Press.Google Scholar
Scarpetta, S., Bassanini, A., Pilat, D. and Schreyer, P. (2000), ‘Economic growth in the OECD area: recent trends at the aggregate and sectoral level’, OECD Economics Department Working Paper No. 248, Paris, OECD.Google Scholar
Stiroh, K. (2001), Information technology and the US productivity revival: what do the industry data say?, mimeo, Federal Reserve Board of New York.Google Scholar
The Conference Board (2002), Performance 2001: Productivity, Employment and Income in the World's Economies, New York, The Conference Board.Google Scholar