Productivity in the OECD Countries: A Critical Appraisal of the Evidence

Abstract

The failure of the neoclassical growth model to account for differences in output per worker across countries has suggested that these differences should be driven by cross-country differences in total factor productivity (TFP). This paper discusses various measures of productivity and its determinants for the OECD countries from different dimensions; (i) the measurement perspectives; (ii) evidence on the evolution of productivity levels across OECD countries; and (iii) a critical review of the theoretical and empirical issues regarding the determinants of cross-country productivity differentials.