Global trends since the pandemic
In this paper, Fernald and Li provide a comprehensive analysis of global productivity trends since the onset of the COVID-19 pandemic in 2020. Some of their key findings:
- Volatile Productivity: Productivity, or output per hour, has been volatile since the pandemic began, with advanced economies initially experiencing a surge followed by a crash and a return to pre-pandemic trends.
- Cyclical Patterns: The broad contours of productivity growth during and since the pandemic have been heavily influenced by predictable cyclical patterns rather than a fundamental shift in productivity trends.
- Impact of Telework: There is little evidence that the sharp rise in telework has had a notable impact on productivity, neither positively nor negatively
- Pre-Pandemic Concerns: The slow-productivity-growth trajectory that many advanced economies and some emerging markets faced before the pandemic does not appear to have changed significantly as a result of the pandemic.
- Future Uncertainties: The authors acknowledge uncertainties and open questions regarding productivity trends, including the short data sample since the start of the pandemic, ongoing adjustment costs, and the potential impact of new innovations like generative AI.
Productivity in the World Economy During and After the Pandemic
Authors: John Fernald, Huiyu Li
From: INSEAD, Federal Reserve Bank of San Francisco
The link between creativity and productivity
Aakash Kalyani in this paper addresses the paradox of increasing patent filings alongside declining aggregate productivity growth in recent decades. Towards this goal, he introduces a novel, text-based measure of patent creativity, which is the share of technical terminology in a patent that did not appear in previous patents. The main conclusions of the paper can be summarized as follows:
- Decline in Patent Creativity: Kalyani’s analysis reveals a significant decline in the creativity of US patents over time. Creative patents, as opposed to derivative ones, are associated with substantial improvements in firm-level productivity. More specifically, in the U.S. the correlation between creative patents per capita and productivity growth over the decades is 75.7%. This result suggests that the overall decline in patent creativity is a contributing factor to the stagnation in productivity growth.
- Inventor Life-Cycle: The research indicates that inventors tend to file more creative patents at the beginning of their careers, with a shift towards filing more derivative patents as they gain experience.
- Demographic Influence: Kalyani embeds a life-cycle of creativity in a growth model with endogenous creation and imitation of technologies. In this model, falling population growth explains 27% of the decline in patent creativity, 30% of the slowdown in productivity growth, and 64% of the increase in patenting.
- Industry-Specific Trends: The author also examines industry-specific trends, particularly in computer-related manufacturing. It shows that while this industry experienced significant productivity growth and creative patenting during the 80s and 90s, both declined after 2006, despite a continued exponential increase in new patent filings.
The Creativity Decline: Evidence from US Patents
Author: Aakash Kalyani
From: Federal Reserve Bank of St. Louis
