In this article I show that a permanent possitive shock on the rate ofinvestment-specific technical progress might cause, at least in the shortrun, a fall of the growth rate of both output per capita and total factorproductivity, as measured by the Solow residual. Several simulations areperformed which show that the extent of the Productivity Slowdowndrastically depends on the elasticity of the marginal cost of producing aunit of capital good with respect to the rate of investment-specifictechnical progress.
