The Productivity Puzzle

The Productivity Puzzle refers to the unusual slowdown in economic growth and improvements in efficiency seen in many advanced countries since the early 2000s. Typically, productivity—how effectively work turns into goods and services—progresses steadily with technological advances. However, despite rapid tech development in areas like AI and automation, this growth has not translated into expected productivity gains. Possible reasons include slower adoption of new technologies, changes in workforce skills, measurement challenges, or shifts in economic structure. Understanding this puzzle is important because productivity directly influences living standards and economic health.