Part of what happens is that the preconditions are set up during the downturn, so that when business picks up, there is a burst of productivity. These things happen with a lag.
On Mon, Sep 24, 2007 at 08:42:39PM -0700, Jim Devine wrote: > Michael Perelman wrote: > > > A recession/depression also increases > > > productivity. > > Doug Henwood wrote: > > Not necessarily. The accepted wisdom is that productivity is > > procyclical. It was widely seen as unusual that U.S. productivity > > stayed strong through the 2001 recession and the weak 2002-3 recovery. > > labor productivity (deliberately avoiding the bogus concept of "total > factor productivity") is usually pro-cyclical because as demand and > production increase, overhead labor is used more completely. However, > a severe recession can lead to the sacking of most overhead labor, > which can raise labor productivity. Also, these days -- after the > thinning out of white collar jobs during the 1990s and the move to > "leaner" production hierarchies -- the pro-cyclical effect is > weakened. > > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
