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Posted by: Michael Mandel on October 11
As regular readers of this blog know, I think that total factor productivity growth is the best measure of an economy’s health. A new paper from the BIS calculates TFP growth for most of the large industrial countries over the past 40 years, and comes up with some surprising conclusions (Thanks to the very sharp New Economist for pointing out the paper).
Here are the winners and losers, ranked by two criteria—current level of TFP growth, and change in TFP growth over the past forty years.
Doing okay but not great:
The big surprises are the decent performance of France, and the terrible performance of the UK, Netherlands, and Spain, especially since the UK and Spain are thought of as success stories. France has maintained roughly a 1% growth rate of TFP for the past 40 years, which is not bad but not terrible either, especially when compared to the 0.3% clocked by Japan. I have actually begun to worry more about the UK than France.
Here is the full data table. I ranked the countries on current TFP growth, and the amount of change in TFP growth, and then averaged the rankings.
|Total Factor Productivity Growth|
|Column A= Difference between TFP growth|
|in 1996-2004 and TFP growth in 1966-75|
|Column B = TFP growth rate in 1996-2004|
|Data:||Les Skoczylas and Bruno Tissot|
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.