Last week I gave a talk at the University of Nebraska, and Julian Alston from UC Davis was also there. He presented some recent research with Matt Anderson and Phil Pardey about productivity growth in agriculture. While I have seen some discussions about the possibility of a slowdown in productivity growth in developing countries, Alston's research suggest it is a phenomenon alive and well here at home. This is important stuff. Falling productivity growth has important implications for sustainability, food security, and research and development. They write:
“We detect sizable and significant slowdowns in the rate of productivity growth. Across the 48 contiguous states for which we have very detailed data for 1949– 2007, U.S. multifactor productivity (MFP) growth averaged just 1.18 percent per year during 1990–2007 compared with 2.02 percent per year for the period 1949–1990. MFP in 44 of the 48 states has been growing at a statistically slower rate since 1990. Using a longer-run national series, since 1990 productivity growth has slowed compared with its longer-run growth rate, which averaged 1.52 percent per year for the entire period, 1910–2007. More subtly, the historically rapid rates of MFP growth during the 1960s, 1970s and 1980s can be seen as an aberration relative to the long-run trend. A cubic time-trend model fits the data very well, with an inflection around 1962. We speculate that a wave of technological progress through the middle of the twentieth century—reflecting the progressive adoption of various mechanical innovations, improved crop varieties, synthetic fertilizers and other chemicals, each in a decades long process—contributed to a sustained surge of faster-than-normal productivity growth throughout the third quarter of the century. A particular feature of this process was to move people off farms, a one-time transformation of agriculture that was largely completed by 1980.”
Here's a graph from their paper showing the change in proportional growth rate in yields (i.e., the log of yields) over time for 6 crops with the inflection point indicated for when growth rates began decelerating.
