Current and Prospective Productivity Growth The cyclical slowing in 2001 and gradual expansion in 2002 have raised a critical issue. That question is: Will productivity growth in the years ahead more closely resemble the substantial gains over the 1960-73 period or the weaker performance of the 1973-95 slowdown?
I tend to believe that future growth will most likely follow the 1960-73 pattern, and the most recent record of productivity growth reinforces that view. Productivity is a cyclical variable that typically falls in recessions. However, during the most recent downturn, productivity never declined and instead continued to grow at a fairly strong pace.