The Aggregate Productivity Slowdown : A System Approach

I revisit the productivity slowdown debate by estimating the capital-labor elasticity and the bias of technical change for the U.S. economy under three different models of technical change. One with constant growth rates, one in which growth is linear, and one with flexible time-varying growth rates. I find evidence in support of non-constant growth rates of factor-augmenting technical change. Labor-augmenting technical change growth rates are decelerating, while capital-augmenting technical change is non-negligible but vanishes quickly