{"title":"Okun vs. Verdoorn: distinguishing between cyclical and structural effects of output on productivity","authors":"Walter Paternesi Meloni","doi":"10.1007/s40888-024-00334-1","DOIUrl":null,"url":null,"abstract":"<p>According to Kaldor and Verdoorn, the evolution of output is expected to structurally enhance labour productivity by generating economies of scale. At the same time, Okun’s law suggests a pro-cyclical association between output and productivity. These two aspects of the relationship often pose challenges in empirical studies when distinguishing between short-run (<i>à la</i> Okun) and long-run (<i>à la</i> Verdoorn) effects. In light of these complexities, our paper offers three contributions. First, we discuss the extant approaches to the estimation of long-run Verdoorn effects. Second, we investigate the presence of a short-run, Okun-like effect. Third, we propose a methodological advancement to separate the cyclical from the structural relationship between output and productivity. We employ panel cointegration-based techniques on data from a large set of OECD countries over the period 1970–2019. Our findings reveal a short-run coefficient of about 0.3 between growth rates and a long-run elasticity of about 0.5 between levels.</p>","PeriodicalId":44858,"journal":{"name":"Economia Politica","volume":"56 1","pages":""},"PeriodicalIF":2.8000,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economia Politica","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s40888-024-00334-1","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
According to Kaldor and Verdoorn, the evolution of output is expected to structurally enhance labour productivity by generating economies of scale. At the same time, Okun’s law suggests a pro-cyclical association between output and productivity. These two aspects of the relationship often pose challenges in empirical studies when distinguishing between short-run (à la Okun) and long-run (à la Verdoorn) effects. In light of these complexities, our paper offers three contributions. First, we discuss the extant approaches to the estimation of long-run Verdoorn effects. Second, we investigate the presence of a short-run, Okun-like effect. Third, we propose a methodological advancement to separate the cyclical from the structural relationship between output and productivity. We employ panel cointegration-based techniques on data from a large set of OECD countries over the period 1970–2019. Our findings reveal a short-run coefficient of about 0.3 between growth rates and a long-run elasticity of about 0.5 between levels.
期刊介绍：
This journal publishes peer-reviewed articles that link theory and analysis in political economy, promoting a deeper understanding of economic realities and more effective courses of policy action. Established in 1984, the journal has kept pace with the times in disseminating high-quality and influential research aimed at establishing fruitful links between theories, approaches and institutions. With this relaunch (which combines Springer’s worldwide scientific scope with the Italian cultural roots of il Mulino and Fondazione Edison, whose research has been published by the two mentioned publishers for many years), the journal further reinforces its position in the European and international economic debate and scientific community. Furthermore, this move increases its pluralistic attention to the role that – at the micro, sectoral, and macro level – institutions and innovation play in the unfolding of economic change at different stages of development.
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号
