Buttonwood: Working hard for the money

Posted: June 3, 2016 in economy
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There are more explanations than solutions for the productivity slowdown

ECONOMIC growth stems from two main sources: putting more people to work or enabling workers to operate more efficiently (ie, better productivity). With the workforce in many developed economies likely to stagnate or decline in the next two decades as the baby-boomer generation retires, a lot is riding on improvements in productivity.
So the recent progress of productivity in developed economies is cause for severe disappointment. As the chart shows, growth is well below its level in the late 20th century; the brief surge that was seen in places like America and Canada at the time of the dotcom boom has also dissipated. A combination of productivity growth of 1% or so and a stagnant workforce implies very sluggish GDP growth.

A new paper* from the OECD tries to understand this puzzling slowdown in productivity. It cites a number of possible explanations. There is the “progress is over” thesis, for example: …

via Economic Crisis http://ift.tt/1RSAgg4

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