More on The Myth of US Economic Superiority
Since the last post, I read an article in, of all places, The Economist aimed at debunking the myth of the US economic miralce. One thing I left out in the last post was the effect of population growth and German re-unification:
...GDP figures exaggerate America's relative performance, because its population is growing much faster. GDP per person (the single best measure of economic performance) grew at an average annual rate of 2.1% in America, against 1.8% in the euro area—a far more modest gap...
...Strip out Germany, and the euro area's annual growth in GDP per person rises to 2.1%, exactly the same as America's...
I note the Euro area is taken as it is a single economic unit, taking the whole EU, growth figures are again slightly higher.
And something new to me, about the improvement in productivity:
...America's productivity has indeed quickened in recent years, but the difference between productivity growth in America and the euro area is exaggerated by misleading, incomparable figures. In America the most commonly used measure of productivity is output per hour in the non-farm business sector. This grew by an annual average of 2.6% over the ten years to 2003. For the euro area, the European Central Bank publishes figures for GDP per worker for the whole economy. This shows a growth rate for the period of only 1.5%. But unlike the American numbers, this figure includes the public sector, where productivity growth is always slower, and it does not adjust for the decline in average hours worked.