Research on Productivity Growth and Productivity Differences: Dead Ends and New Departures
Author(s)
Nelson, Richard
Abstract
The premise behind this essay is that the theoretical model underlying most research by economists on productivity growth over time, and across countries, is superficial and to some degree even misleading regarding the following matters: the determinants of productivity at the level of the firm and of interfirm differences; the processes that generate, screen, and spread new technologies; the influence of macroeconomic conditions and economic institutions on productivity growth. I suggest that there is evident unrest about the prevailing theoretical formulation. While some empirical research sticks quite close to it, a substantial body of research proceeds along lines that deviate in important ways from the tenets of that theory.
