Overstate. This is unprecedented for any major economy. Moreover, relative to its stagnant population Europe has put more people to work over the last decade. The table shows that the UN predicts long-term decline of population growth rates in every region; however, short-term baby booms and healthcare improvements, among other factors, can cause reversals of trends. Since then the catch-up process has stalled, and most recently it has even reversed.
Normally, one expects output growth to exceed the measured growth in capital and labour because the efficiency with which these factors are being used increases as technology improves. Those rowing vigorously make little headway, but those who do not undertake this effort fall back.What is the nature of this current pushing in a negative direction? Which of the following will NOT increase the average productivity of labor?
Not necessarily. Moreover, the US should be affected by globalisation in a similar way as the EU, but there has been no similar deterioration in the performance of the US since 1995. But Europe is more than a collection of special cases. Or rather most economies in Europe are not doing well. The recipe almost universally recommended is “structural reforms”. Given the amount of people and capital available, Europe should thus be growing strongly. Authoritative studies of the time suggested that the creation of the internal market should lead to a boost to GDP growth of 4.5 to 6.5 per cent, which, even if distributed over several years, should have increased the measured growth rate (of productivity) by about one half of a percentage point.Next came the Economic and Monetary Union in 1999, which was also expected to increase growth prospects, at least temporarily. T/FOther things equal, which of the following would increase the rate of economic growth, as measured by changed in real GDP?Simultaneous consumption and network effects are sources of increasing returns and economies of scale that promote productivity growth. The movement of workers from lower productivity … Most of Northern Europe is in relatively better shape, with close to full employment. Over the following 15 years, the difference changed sign and the US grew at a rate 15 percentage points faster. Most of Southern Europe is only gradually emerging from the devastating effects of the eurozone crisis, with unemployment receding only gradually and a country as big as Italy seemingly stuck in a growth rate below one per cent even as risk premia have fallen dramatically. Before then, Europe was catching up to the US. The technical term is total factor productivity (TFP). Economists who believe that the 1995-2012 rise in the average rate of productivity growth will be long lasting say that: innovations in computers and communications, together with global capitalism, are greatly boosting U.S. productivity and the economy's potential economic growth rate. Understate. The countries which did not undertake reforms were hit the hardest by the crisis, and those with the most flexible economies (e.g. The European economy is not doing well. By contrast, during the following 15 years (1995-2010), the US grew faster than the EU by a cumulative 20 percentage points. •Implies that a small difference in growth rates cumulates to a huge difference in living standards over time •years to double~= 70/annual growth rate % Growth in USA 1950-2015 •Real GDP increased more than sevenfold, ~3.1% per year •real GDP per capital more than tripled, ~2% per year. Pollution, climate change, stressful work eviroeng. An increase in the size of the labor force. A major study by the Commission in 1992 entitled “One Market, One Money” argued that the benefit from eliminating currency exchange costs and lower interest rates in some countries should constitute a significant boost to growth and productivity.Other EU structural reform efforts since then include the liberalisation of the markets for financial services and the so-called services directive, which was approved by the EU with considerable controversy in 2005, with the aim of facilitating the cross-border provision of services. But this is a recipe that has been tried intensively in recent decades, and it has failed.Moreover, it seems that the low growth problem is particularly acute in Europe.
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