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John W. Dawson
''Regulation and Productivity Growth: Are We in a New Productivity Slowdown?''
( 2020, Vol. 40 No.1 )
This paper updates the empirical evidence on the role of federal regulation and taxes in the well-known productivity slowdown of the 1970s, based on revised and extended data on federal regulation and marginal tax rates through 2016 in the U.S. The analysis uses a time-series model derived from endogenous growth theory with regulation and taxes as policy variables. Co-movement among the policy variables and productivity growth—during both the slowdown and the subsequent recovery—suggests regulation may have played a role. Tax effects are small and statistically insignificant. The updated results also suggest a new productivity slowdown is underway, since the early-2000s, and that regulation may once again have something to do with it.
Keywords: Regulation, taxes, macroeconomic performance, productivity slowdown
JEL: O4 - Economic Growth and Aggregate Productivity: General
L5 - Regulation and Industrial Policy: General
Manuscript Received : Sep 09 2019 Manuscript Accepted : Feb 05 2020

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