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Goldman Sees Signs a Big Rebound in Economic Productivity Is On The Way

“I Am Productivity Personified.”

“I Am Productivity Personified.”

Photographer: Daniel Acker

Back in 2015, Goldman Sachs Group Inc.’s Chief Economist Jan Hatzius used Grand Theft Auto to explain the mystery of sluggish productivity growth in the world’s developed economies.

Labor productivity growth had averaged between 0.5 to 1 percent in the U.S., eurozone and the U.K. since the 2008 financial crisis — far below its long-term average and feeding into slower headline economic growth more generally.

That seemed at odds with the boom in digital technologies in the same period, often reflected in the share prices of big tech companies like Apple Inc., Facebook Inc. and Google (Alphabet Inc.).

So how to explain the discrepancy? Hatzius and his economists argued that statisticians hadn’t yet figured out a good way to measure incremental improvements in things like video games, streaming content or software — which meant such advancements weren’t being captured in economic figures in the same way that the hardware-related gains of the 1990s had been.