Stories about Productivity
In this paper, it is argued that, given its relatively short duration and high year-to-year variability, the MFP data set does not contain enough information to allow clear statistical discrimination between competing hypotheses. As a result of this lack of information, combined with the human predilection for observing patterns, a range of alternative stories, each of which may be supported by an appropriate interpretation of the data, has been produced. Three such stories are described here. The first is the ONew EconomyO story put forward by Parham and others. The second story agrees with the first regarding the 1990s, but interprets the subsequent decline in productivity growth as the result of a failure to pursue microeconomic reform with sufficient vigour. The third story rejects the idea of a productivity miracle in the 1990s and argues instead that productivity growth rates experienced a sharp decline at the end of the postwar OGolden AgeO around 1970, and that this decline has been sustained, although with fluctuations around the trend.