Productivity growth slowdown challenges traditional economic growth models.
The article explores why productivity growth has slowed down since the 1970s and how it challenges a well-known growth model. By using a two-sector model with separate consumption and investment sectors, the researchers found that if real GDP is measured with the Fisher index and productivity growth in the consumption sector slows down, overall productivity growth will also slow down. They also discovered that the Fisher index is a good way to measure real GDP in this two-sector model.