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N°294 |
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| 30 November 2009 |
The Productivity Gap Between the United States
and the Euro Zone Continues to Widen |
| Michel Fouquin |
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| From 1950 to 1970, labour productivity levels converged between the United States – considered to be the global technological
leader – Western European countries and Japan. But thereafter this process gradually became less marked before disappearing
completely since the mid-1990s: while in the United States, labour productivity growth accelerated, it slowed down in the
majority of European countries and Japan. Technological progress, associated with the development of information and
communication technologies (ICT), goes some way towards explaining the revival of productivity in the USA, before the dotcom
bubble burst. However, it does not tally with the decline seen in Europe because, although the level of investment in
ICTs in Europe falls some way behind that of the USA, it has nonetheless grown significantly. A fundamental explanation for
the divergence relates to a change in intensity of the employment component of growth. While it fell sharply in the United
States, there was a significant rise in Europe where, prior to the crisis of 2007-2008, mass unemployment fell as a result. The
most recent data for 2009 confirm the existence of diverging productivity trends. |
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