Hello, all. I've been lurking for a while now. This forwarded
message is my first post. I thought it was very interesting.
BTW, would anyone also care to comment on Mankiw's text as a replacement
for the venerable Samuelson?
~Alypius Skinner The following is taken from G.Mankiw
'Macroeconomics' Fourth Edition 1999
The Worldwide Slowdown in Economic
Growth
One of the most perplexing problems that
policymakers have faced over the past 20 years is the worldwide slowdown in
economic growth that began in the early 1970s. Growth in the United States fell
from 2.2 percent to 1.5 percent between 1971 and 1992.
Other countries experienced similar or more severe
declines. United Kingdom growth fell from 2.4 percent to 1.8 percent. Japan fell
from 8.2 percent to 1.8 percent. Studies have shown that the slowdown in growth
is attributable to a slowdown in the rate at which the production function is
improving over time. Accumulated over many years, even a small change in
productivity growth has a large effect on economic welfare. Real income in the
United States today is more than 20 percent lower than it would have been had
productivity growth remained at its previous level. Many economists have
attempted to explain this adverse change. Here are some of their
explanations:
* The composition of the labor force has been
changing. The entrance of the younger baby-boom generation into the labor force
beginning in the 1970s lowered the average level of experience and, therefore,
the productivity of labor.
* An increase in government regulations, such as
those to protect the environment, requires firms to use less productive
production methods. The regulations reduce growth in productivity and incomes
(even if the policy is socially desirable).
* Large changes in oil prices in the 1970s caused
by OPEC, the oil cartel, made some of the capital stock prematurely obsolete.
Firms may have retired some of their machinery that was heavily dependent on
fuel.
* The world has started to run out of new ideas
about how to produce. We have entered an age of slower technological
progress.
Which of these suspects is the culprit? All of them
are plausible, but it difficult to prove beyond a reasonable doubt that any one
of them is guilty. The world wide slowdown in economic growth largely remains a
mystery.
.
|
- Re: Fw: Worldwide slowdown in economic growth A. M. Skinner
- Re: Fw: Worldwide slowdown in economic growth Fred Foldvary
- Re: Fw: Worldwide slowdown in economic growth Jacob W Braestrup
- Re: Fw: Worldwide slowdown in economic growth Fred Foldvary
- Re: Fw: Worldwide slowdown in economic growth Jacob W Braestrup
- Re: Fw: Worldwide slowdown in economic growth Fred Foldvary
- Re: Fw: Worldwide slowdown in economic growth Jacob W Braestrup