Objective
The last decade has witnessed the resurgence of United States (US) productivity and the contemporaneous decline of that of the European Union (EU). This productivity gap means that Europe is falling behind the US and it may therefore be difficult to maintain the European standard of living. The current research explores the causes of the aforementioned divergence by adopting a multi-sector framework. It is submitted that a multi-sector framework offers a preferential model for identification of sources of productivity slowdown as compared with a one-sector model. By departing from the standard one-sector model it is possible to identify additional sources of productivity slowdown, for example (1) the distance of the European investment goods sectors from the technological frontier, (2) the slower adoption process of new investment goods by the European consumption goods sectors.
These two alternative sources of productivity differential are estimated by applying a dynamic factor model to US and EU sectoral data (GGDC data set). With this econometric technique, each variable is decomposed into components that are industry-specific but common across nations, and components that are nation-specific but common across industries. By estimating sector- or national-specific dynamic factors it is possible to: (1) determine the European sectors for which the country-component accounts for more than the sectoral one in order to explain productivity dynamics; (2) estimate the correlation of the variance explained by the sector-component with other explanatory variables; (3) identify the heterogeneous responses of EU and the US to common shocks.
This project provides valuable input into the debate about realizing the Lisbon Agenda. According to the recent Sapir report, both innovation and reforms are central triggers for the European growth process. The proposed empirical analysis and the multi-sector framework will contribute to the discussion on this policy debate.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
- social sciences economics and business economics production economics productivity
- social sciences economics and business business and management employment
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Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
FP6-2005-MOBILITY-5
See other projects for this call
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Coordinator
SAN DOMENICO DI FIESOLE, FIRENZE
Italy
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.