The Economist ‘Free exchange’ had a piece on productivity and how it has been rather stagnant in the rich countries. Since the 1960’s rates have dropped (except for Japan in 1970’s) and economist are suggesting that this has contributed to such low wage increases. Explanations for this problem fall into three categories:
1. Robert Gordon (Northwestern University) suggest that humanity has run out of big ideas. Inventions of the early19th and 20th centuries (electricity, indoor plumbing etc) have had a much greater impact on productivity than those of recent technological advances. However it was software and computing power that was the driver behind the productivity boom of the late 1990’s. Productivity growth has also slowed in developing countries (Mexico and Turkey) which should be able to achieve greater output per worker with using technology.
2. Some have suggested that the problem lies in the way productivity is measured as…
View original post 251 more words
Utopia, you are standing in it! 
Recent Comments