The Falling Productivity in West Asian Arab Countries Since the 1980s: Causes, Consequences, and Cur
16 June 2023
The non-GCC Arab 7 Bai and Perron’s (1998, 2003) method allows us to identify the phases of growth solely derived from the data, minimizing the residual sum of squares of the regression of the natural log of the relevant variable on the time trend over several years of the data. [...] The Sixth, in the most recent period, 2009- fall in global oil demand and the subse- 2019, the per capita GDP and labour quent decline in oil prices in the early 1980s productivity continued to suffer in the lowered economic growth in all the GCC West Asian Arab economies, with mini- 9 The average growth rate for 1992-2009, which includes the crisis years 2008 and 2009, is lower by 0.1 percent- ag. [...] The employment rate consists of only the employed people in the numerator and the total population in the denominator. [...] The third term is the product of the tivity (y) as the ratio of the sum of sec- change in employment share and change in toral value added and the sum of sectoral productivity, thus capturing the expansion employment (see Erumban and Das, 2019). [...] economy, yet it has been positive and im- Finally, the negative TFP growth is portant in the 1970s and 1980s in the ad- a wide-spread phenomenon in the West vanced economies, and in the 1990s in the Asian Arab states (Table 7).