March 4, 2003

Sectoral TFP developments in the OECD

This note describes the sectoral total factor productivity (TFP) developments in the OECD between 1970-1990. Based on the ISDB data of the OECD, we confirm the stylised fact that TFP growth is relatively high in agriculture and relatively low in services.

Within manufacturing, the TFP growth in chemicals and in capital goods is high whereas it is low in food processing, paper and publishing and metals. The TFP growth in services sectors like construction, financial services and other (government) services seems to be zero or even negative, while it is relatively high in transport and communication. These sectoral pictures are not universal. Differences between countries are rather large.

Also, the TFP growth per year appears to be non constant over time. We use the results from this study in our dynamic CGE model WorldScan to model differences in productivity growth between the sectors. In particular, we employ this mechanism in the European long term scenarios.


Willemien Kets

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