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Has the Tradeoff Between Productivity Gains and Job Growth Disappeared?
Author(s) -
Cavelaars Paul
Publication year - 2005
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.0023-5962.2005.00277.x
Subject(s) - productivity , economics , welfare economics , political science , economy , humanities , philosophy , economic growth
SUMMARY ‘Policymakers’ efforts to boost trend output growth may be hampered by the presence of a trade‐off between productivity gains and job creation. This paper presents empirical evidence that the negative relationship between productivity growth and employment growth that prevailed in the 1960s and 1970s has disappeared since then. This finding is robust to using alternative measures and including other explanatory variables. The improved trade‐off may be good news for policymakers who aim at raising the ‘speed limit’ of the economy.