Monday, February 20, 2012

Productivity and U.S. Competitiveness

The link between competitiveness, productivity and regulation gets special focus in this issue of the Economist. For those of you who are new to the reading the Economist, Schumpeter is a weekly column about markets. It is named after an economist, Joseph Schumpeter, who championed the "creative destruction" of markets.

Economist (2-18-2012) United States' economy Over-regulated America

Economist (2-18-2012) Schumpeter: This times it's serious

In this interview (6 minutes), the Chief Economist for the Conference Board, Bart van Ark, explains how productivity is measured ( = real GDP/hours) and worrisome signs for the future. With real GDP growing slowly and hours finally increasing as more workers are hired, productivity growth is slowing. Productivity is pro-cyclical - it grows when real GDP grows.

Productivity in developed nations is still 4 times higher than in emerging nations. While productivity is growing faster in developing nation as they borrow technology, they still have along way to go to catch up.

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