August 20, 2003
Productivity Growth: America vs. Europe

Robert Gordon argues that a big chunk of the miraculous growth in U.S. productivity--and the bulk of the difference between the U.S. and the European experience--comes from the interaction of high investment in IT in the U.S. and the economic freedom to reconfigure retail and sell goods in high-volume from newly-built "big box" automobile-accessible stores: FT.com Home US: ...Where does Europe fit in? The data show that Europe's performance is worst in those industries that are heavy users of ICT, especially retail trade, which just happens to be where the US's productivity showing is strongest. America's retail productivity performance has all been achieved in stores newly built since 1990, not in existing stores. The new stores are the "big boxes" such as Wal-Mart, Home Depot and Best Buy, large new buildings set up on greenfield sites at interstate highway junctions, in suburbs and, increasingly, in inner cities. As these new stores reap the rewards of their size, openness and accessibility and drive smaller stores out of business, they bolster the average productivity of the US retail sector as a whole. While countries differ, Europe has many ways of stifling modern retailing, from green belts and land-use restrictions to laws that...

Posted by DeLong at 08:23 AM

August 15, 2003
Good Industrial Production News for July

A surprisingly large jump in industrial production in July--especially considering that manufacturing employment fell by half a percent, by 71,000 in July: from 14.68 to 14.61 million: FT.com Home US: US industrial production rose at its fastest pace since January last month, adding to the evidence that economic growth is accelerating. Output rose by a robust 0.5 per cent over the month, its third consecutive gain and well ahead of expectations of a 0.2 per cent rise. The figure was boosted by a steep rise in utility output - which economists said reflected the greater use of air conditioning - and strong car sales, which have been helped by a new round of incentives. But the rise in output was relatively broad-based, with a particularly strong 4.2 per cent rise in home electronics... "This will increase confidence that we have a recovery on our hands," said Mark Cliffe, chief economist at ING. "There is now a fighting chance of getting growth of above 4 per cent by the end of the year." It's only one month, and manufacturing is not the same thing as industrial production, but it's interesting to see industrial production rising at a 6% per year rate...

Posted by DeLong at 09:26 PM

July 06, 2003
What Should College Professors Be Paid?

The past is a different country. Even the relatively recent past of, say, a century ago is a very different country. In 1905 "G.H.M.", an anonymous college professor, wrote a four-page article for the Atlantic Monthly in which he pleaded for more money for college professor salaries, and claimed to be vastly underpaid. The first thing to note is the relative level of professorial salaries back then: he claimed that the "average college professorís salary"--the salary that he saw as clearly inadequate and unfairly low--"is about $2,000." Stan Lebergott's estimates in the Historical Statistics of the United States are that the average annual earnings of an employee in America in 1905 were $490 dollars if employed for the entire year--or $451 taking account of the hazards of unemployment. What G.H.M. says is the average college professor's salary is more than four times annual average earnings of the time. Today's professors don't make such large relative salaries (except in business, law, and medical schools). In order to match turn-of-the-century college professors in terms of income relative to the national average, a professor today would have to make an academic salary of roughly $250,000--a height far above any professorial average, and one...

Posted by DeLong at 04:09 PM

April 30, 2002
International Productivity Comparisons

My main point, however, is that the world is complicated, and single statistics are bound to be incomplete. Anyone who presents to you one single number for a nation--and then draws sweeping conclusions from it--is interested in driving you into the corral as if you were a panicked sheep. Don't pay attention to such people....

Posted by DeLong at 03:28 PM

October 12, 2001
A Link to One of My "Interesting Graphs"

Cross-Country Real GDP Comparisons There continues to be a surprisingly, surprisingly large gap between real GDP per capita in the U.S. and real GDP per capita in the other industrial economies. South Korea is now clearly to be counted as among the "industrial" rather than the "developing" countries. If you believe these numbers, then living standards and productivity levels in China and the Philippines today are roughly equivalent to those of the United States in 1925; living standards and productivity levels in India today are roughly equivalent to those of the United States in 1880. Real GDP per capita in Nigeria is now 1/4 of the level of India and 1/7 the level of China. In 1950 Nigeria was arguably the more developed and more prosperous economy....

Posted by DeLong at 09:54 PM