





To see just how marked this TFP decline was after 1973 and whether the recent TFP gains make up for any of the loss, I went to the data. Below is a figure constructed using the quarterly TFP series of John Fernald at the San Francisco Fed. (Click on figure to enlarge.)



Graph #2: Total Factor Productivity (FRED)

Leonard Nakamura of the Philly Fed has done work in that area. Here´s an article from 1997.

http://www.philadelphiafed.org/research-and-data/publications/business-review/1997/march-april/brma97ln.pdf

His Figure 1 more or less replicates the figure in the post. I remember that in 1999 I saw a revision of Figure 1. It changes significantly. TFP (MFP) flattens between 1965-81 and then takes off again.

I am impressed and far less skeptical of the Great Stagnation theory. In my previous The "good old days" really were better in terms of TFP growth. Okay,of the Great Stagnation theory. In my previous post I argued that Cowen failed to appreciate how dramatically our lives have changed since the advent of the internet and faster computing. Now I am thinking these gains are but a faint shadow of what they could have been had TFP continued to grow at its 1947-1973 trend.in terms of TFP growth.