The distribution of sectoral TFP growth rates: International evidence

This paper investigates the distributional properties of TFP growth rates for countries in the G7 group. Our findings lend support to the hypothesis that multifactor productivity shocks can be plausibly fitted by a symmetric non-Gaussian stable distribution model. This leads to non-negligible implications for business cycle analysis.

► We offer evidence on the distribution of sectoral TFP growth rates for the G7 economies. ► A symmetric non-Gaussian stable distribution model provides a very good fit to the data. ► The estimated tail weight parameter differs substantially across countries. ► Our findings signal that the arrival and diffusion of technological innovations are country-specific.