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NY Fed On Dwindling Productivity Gains From Electronic Miniaturization

  • Productivity remains in focus, with heavily negative labor productivity through 1H22 as payrolls growth boomed whilst the economy was in technical recession when looking at the average of GDP and GDI.
  • NY Fed research takes a look at long-term factors of productivity and finds that 12% of all productivity gains between 1960-2020 can be attributed simply to electronic miniaturization.
  • This was however concentrated heavily between 1985-2005 as computers and electronics were incorporated into virtually every industry.
  • However, since then, near ubiquitous use of miniature electronics has seen one important contributor of productivity disappear.

Source: NY Fed

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