Harvard professor Kenneth Rogoff has an informative piece on the Project Syndicate web site (HT to Planet Money).
He addresses the concern that Europe and the U.S. may be heading for a period of stagnation similar to that faced by Japan in the 1990s, a "lost decade". And while there are some similarities, he points out there are also important differences, the main one being productivity.
As we know, long-run economic growth is determined by productivity. Japan had some significant productivity problems, according to Rogoff. The U.S. doesn't have the same issue. But as he points out that in the latter part of the article; that could change depending on the policies put in place. Policies that improve productivity have the ability to improve long-run growth.
I would add that those policies also presage continued structural change with the need for more skilled workers. The supply of skilled workers may come from better preparation (call for education) or retraining (call for different types of policies for the unemployed).
I would like to hear your thoughts.
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1 comment:
The problem is that we often believe that a high productivity is working more and more, and doing more tasks in a day, and that actually goes against us.
Just look at the case of Japan in where people overwork themselves to death, that's why the new policies should be focused on having spare time for everything. We can only be humans, you know.
There's an article I wrote on this subject on Squidoo:
http://www.squidoo.com/ImproveEfficiencyAndProductivity
Thanks,
Matie
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