Big government stunts innovation

Advertisement

Image

Is slow growth the new normal?

Europe’s 30 glorious years of growth

Image

Can’t remember the source

Image

“A Life Cycle Model of Trans-Atlantic Employment Experiences” by Thomas J. Sargent

Lee Ohanian on GFC and continuing Eurosclerosis

Image

Gap in GDP per Australian, Canadian, French, German, Japanese, New Zealander and British hour worked with the USA

This data tells more of a story than I expected. Firstly, New Zealand has not been catching up with the USA. Japan stopped catching up with the USA in 1990. Canada has been drifting away from the USA for a good 30 years now in labour productivity.image

Data extracted on 28 May 2016 05:15 UTC (GMT) from OECD.Stat from OECD Compendium of Productivity Indicators 2016 – en – OECD.

Australia has not been catching up with the USA much at all since 1970. It has maintained a pretty consistent gap with New Zealand despite all the talk of a resource boom in the Australia; you cannot spot it in this date are here.

Germany and France caught up pretty much with the USA by 1990. Oddly, Eurosclerosis applied from then on terms of growth in income per capita.

European labour productivity data is hard to assess because their high taxes lead to a smaller services sector where the services can be do-it-yourself. This pumps up European labour productivity because of smaller sectors with low productivity growth.

Eurosclerosis, Swedosclerosis, the British Disease and rising inequality harming economic growth

The Washington Centre for Equitable Growth have joined the Wall Street Journal in falling for that dodgy OECD hypothesis about rising inequality holding back economic growth.

The chart below shows stark differences between egalitarian Sweden and France, and the more unequal UK since 1970 in departures from a trend growth rate of 1.9% in real GDP per working age person, PPP.

image

Source: Computed from OECD Stat Extract and The Conference Board. 2015. The Conference Board Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/

In the above chart, a flat line is growth at the same rate as the USA for the 20th century, which was 1.9%  for GDP per working age person on a purchasing power parity basis. The USA’s growth rate is taken as the trend rate of growth of the global technological frontier. A falling line in the above chart is growth in real GDP per working age person, PPP, at below this trend rate of 1.9%; a rising line is above trend rate growth for that year.

  • Sweden really had been the sick man of Europe until it turned its back on high taxing, welfare state socialism in the early 1990s.
  • France has been in a long decline so much so that the global financial crisis is hard to pick up in the acceleration in its long decline in the mid-1990s.

Britain did very well, both under the neoliberal horrors of Thatcherism and the betrayals by Tony Blair of a true Labour Party platform. The UK grew at above the trend annual growth to 1.9% for most of the period from the early 1980s to 2007.

Neither France or Sweden, despite their egalitarian economies, kept up with the US growth rate since 1970. Under the OECD’s hypothesis, if France and Sweden had been more unequal, their trend growth rates would have been even more appalling since 1970.

Eurosclerosis illustrated in the labour market

Source: Linda Regber.

Do the European welfare states free ride off American entrepreneurship and innovation?

image

Source: Daron Acemoglu A Scandinavian U.S. Would Be a Problem for the Global Economy – NYTimes.com.

French, German, Italian and British equilibrium unemployment rates, 1968 – 2017

Unlike the USA, the German, Italian, British and French equilibrium unemployment rates all show fluctuations that reflect changes in their underlying economic circumstances and labour market reforms. The case of the British, the rise of the British disease and Thatchernomics. The case of German, its equilibrium unemployment rate rose after German unification and then fell after the labour market reforms of 2002 to 2005.

image

Source: OECD Economic Outlook November 2015 Data extracted on 10 Nov 2015 07:07 UTC (GMT) from OECD.Stat.

Why is #Italy’s productivity so much weaker

More than 15% of unemployed Europeans haven’t had a job for more than four years

The ups and downs of the Greek economy

What if French and Americans swapped working hours per year

Previous Older Entries

Why Evolution Is True

Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.

Great Books Guy

Reading The Classics

Science Matters

Reading between the lines, and underneath the hype.

Peter Winsley

Economics, and such stuff as dreams are made on

A Venerable Puzzle

"The British constitution has always been puzzling, and always will be." --Queen Elizabeth II

Real Time with Bill Maher Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The Market Monetarist

Markets Matter, Money Matters...

The Antiplanner

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Pedestrian Observations

For Walkability and Good Transit, and Against Boondoggles and Pollution

Bet On It

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Movie Nation

Roger Moore's film criticism, against the grain since 1984.

~

Franck Portier's professional page

Anti-Dismal

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Bowalley Road

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

History of Sorts

WORLD WAR II, EIGHTIES, MUSIC, HISTORY, HOLOCAUST

Tudor Chronicles

News, reviews and talk all about the Tudors

@STILLTish. Gender Abolition

Examining Gender Identity ideology and its impact on Women's Sex based rights and Gay Rights. Exploring how this has taken such firm root in Western societies (Cognitive & Regulatory Capture).

Offsetting Behaviour

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Conversable Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The Victorian Commons

Researching the House of Commons, 1832-1868

Coyote Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The History of Parliament

Blogging on parliament, politics and people, from the History of Parliament

Books & Boots

Reflections on books and art

Legal History Miscellany

Posts on the History of Law, Crime, and Justice

Sex, Drugs and Economics

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Doc's Books

A window into Doc Freiberger's library

Media Myth Alert

Calling out media myths

European Royal History

The History of the Emperors, Kings & Queens of Europe

Tallbloke's Talkshop

Cutting edge science you can dice with

Marginal REVOLUTION

Small Steps Toward A Much Better World

The Risk-Monger

Let's examine hard decisions!

NOT A LOT OF PEOPLE KNOW THAT

“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.

STOP THESE THINGS

The truth about the great wind power fraud

Trust, yet verify

Searching for the missing pieces of climate change communication

Lindsay Mitchell

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Alt-M

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

croaking cassandra

Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective

James Bowden's Blog

A blog (primarily) on Canadian and Commonwealth political history and institutions

%d bloggers like this: