Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, June 20, 2023

AI Summary. The EU economy was somewhat larger than the US in 2008 ($16.2tn versus $14.7tn), but by 2022 the US had grown to $25tn while the EU and UK combined reached only $19.8tn. The dollar's status as the world's reserve currency allows the US to finance its ambitions without unsettling markets.

Gideon Rachman Financial Times
Date Posted:

In 2008, the EU economy was 10% larger than the US economy. Today, the US economy is 1/3 larger than the EU and the UK. The US is 50% larger than the EU net the UK. @gideonrachman

In 2008, the EU economy was 10% larger than the US economy. Today, the US economy is 1/3 larger than the EU and the UK. ...

Is Europe's economy falling further behind America's?

Core argument: The US economy grew from $14.7tn in 2008 to $25tn by 2022, while the EU's $16.2tn economy in 2008 reached only $19.8tn combined with the UK by 2022, according to Jeremy Shapiro and Jana Puglierin of the European Council on Foreign Relations.

In 2008, the EU and the US economies were roughly the same size. But since the global financial crisis, their economic fortunes have dramatically diverged. As Jeremy Shapiro and Jana Puglierin of the European Council on Foreign Relations point out: “In 2008 the EU’s economy was somewhat larger than America’s: $16.2tn versus $14.7tn. By 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8tn.” The dollar’s status as the world’s reserve currency gives the Americans the ability to finance their ambitions, without spooking the markets. As one European industrialist puts it: “They can just swipe the credit card.”

Takeaways by Macro Roundup® AI

  1. The US economy grew from $14.7tn in 2008 to $25tn by 2022, while the EU's $16.2tn economy in 2008 reached only $19.8tn combined with the UK by 2022, according to Jeremy Shapiro and Jana Puglierin of the European Council on Foreign Relations.
  2. The EU's economy was somewhat larger than America's in 2008, but the two economies diverged after the global financial crisis.
  3. The dollar's status as the world's reserve currency lets the US finance its ambitions without spooking markets, which one European industrialist describes as the ability to "just swipe the credit card.".

AI Summary. Europe's growth slowdown reflects a widespread drop in productivity growth rather than changes in physical capital accumulation, with human capital growth also mattering but varying by country. The productivity decline is larger than in the US: in countries such as the UK and France, productivity growth fell from about 2% to near zero or negative.

Dietrich Vollrath Economic Growth Blog
Date Posted:

.@DietzVollrath argues that Europe’s slow growth, like the US’s slowing growth, is largely driven by a slowdown in human capital growth related to the aging of baby boomers.

Is Europe's growth slowdown driven by falling productivity growth?

Core argument: Productivity growth in the UK and France tracked about 2% per year until roughly 2006 and then dropped close to zero, at times turning negative, a far more dramatic decline than in the US.

Changes in the accumulation of physical capital were not important for Europe's growth slowdown. Changes in human capital growth were important for Europe's growth slowdown, but that effect varies by country. This also doesn't tell me whether it was demographics (as in the US) or some other factor in human capital, like changes in education or working hours. A significant source of the growth slowdown in Europe is due to a drop in productivity growth, pretty much universally. This drop is larger than in the US. If you look at the US, productivity growth rises up until about 2005, and then starts to abate. But if you look at the UK or France, as examples, their productivity growth just sort of tracks 2% up until about 2006, and then it drops down close to zero percent per year, and at times is negative. That's a far more dramatic drop in productivity growth than the US.

Takeaways by Macro Roundup® AI

  1. Productivity growth in the UK and France tracked about 2% per year until roughly 2006 and then dropped close to zero, at times turning negative, a far more dramatic decline than in the US.
  2. A drop in productivity growth is a significant and nearly universal source of Europe's growth slowdown, and that drop is larger than the US decline, where productivity growth rose until about 2005 before abating.
  3. Changes in physical capital accumulation were not important for Europe's growth slowdown, while changes in human capital growth were important, with effects varying by country and no distinction between demographics, education, or working hours.

AI Summary. The yield on three-month US Treasury bills reached 5.3%, matching the expected 12-month forward earnings yield on the S&P 500 after the Federal Reserve held its policy rate at 5–5.25% while signaling most officials expected two more increases. The index has risen more than 15%, leaving investors uneasy about future returns.

Mary McDougall and Daria Mosolova Financial Times
Date Posted:

The yield on three-month Treasurys, the S&P 500 forward earnings and US investment grade debt have converged at 5.3%.

Do higher short-term Treasury yields reduce the incentive to hold stocks?

Core argument: The yield on three-month US Treasury bills was 5.3%, the same level as the expected 12-month forward earnings yield across the S&P 500.

The yield on three-month US Treasury bills was 5.3%this week after the Federal Reserve held interest rates at between 5 and 5.25% but signaled that most of its officials expected a further two rate rises this year. That is the same level as the expected 12-month forward earnings yield across the S&P 500, which has risen by more than 15% since January. Although it is one of the best half-years for the index in two decades, it has left investors nervous about the potential for future returns.

Takeaways by Macro Roundup® AI

  1. The yield on three-month US Treasury bills was 5.3%, the same level as the expected 12-month forward earnings yield across the S&P 500.
  2. The Federal Reserve held interest rates at between 5 and 5.25% while signaling that most of its officials expected two further rate rises this year.
  3. The S&P 500 has risen by more than 15% since January, one of the best half-years for the index in two decades, yet investors remain nervous about the potential for future returns.

AI Summary. Most consumers' nominal incomes continue to rise faster than before the pandemic without commensurate increases in output or offsetting changes in saving. Excluding volatile pay changes for managerial workers and lower-paid workers in the industries hit hardest by the pandemic, hourly pay has risen at about a 5% annual rate in almost every month.

Matt Klein The Overshoot
Date Posted:

There has been no disinflation since mid-2021 as idiosyncratic supply shocks have faded. The current inflation is being driven by strong nominal wage growth without productivity gains. @M_C_Klein

Is wage growth keeping inflation above the Fed's target?

Core argument: Excluding volatile wage changes for managerial workers and lower-paid workers in the industries hit hardest by the pandemic, hourly pay has risen at a 5% yearly rate in almost every month for nearly a year.

The underlying issue is that most consumers’ nominal incomes continue to rise faster than they did before, without any commensurate increases in output or offsetting changes in saving. Strip out the volatile wage changes for managerial workers and the lower-paid workers in industries hit hardest by the pandemic, and the result (red lines below) is that hourly pay has been rising at a 5% yearly rate almost every month for nearly a year.

Takeaways by Macro Roundup® AI

  1. Excluding volatile wage changes for managerial workers and lower-paid workers in the industries hit hardest by the pandemic, hourly pay has risen at a 5% yearly rate in almost every month for nearly a year.
  2. Most consumers' nominal incomes continue to rise faster than they did before, without commensurate increases in output or offsetting changes in saving, which is identified as the underlying issue.
  3. The period of "easy disinflation" is mostly over, leaving the Federal Reserve to grapple with what comes next.

AI Summary. Using data from a Fortune 500 firm that hired both remote and on-site workers, the authors estimate that shifting on-site workers to remote lowered their hourly calls by 4% relative to already-remote workers, accounting for one third of the productivity gap; worker selection explained the other two thirds.

Natalia Emanuel and Emma Harrington Federal Reserve Bank of New York
Date Posted:

Using evidence from call center workers @NataliaHEmanuel @emma_k_h find that remote work lowered workers’ productivity, but the majority of the gap between onsite and remote work was driven by negative worker selection into remote work. @NewYorkFed

How much of the remote work productivity gap reflects worker selection?

Core argument: Hourly calls of on-site workers who went remote around Covid-19 office closures fell 4% relative to already-remote workers at an American Fortune 500 firm, indicating negative treatment effects accounted for one third of the productivity gap.

We ask two questions: how does remote work affect productivity, and how productive are the workers who choose remote jobs? To quantify each factor, we use data from an American Fortune 500 firm that hired both remote and on-site workers prior to Covid-19. Around the office closures of Covid-19, the hourly calls of on-site workers going remote fell by 4% relative to that of already-remote workers, indicating that negative treatment effects accounted for one third of the productivity gap. After the offices were closed, workers who initially chose remote jobs were 8% less productive than those who initially chose on-site jobs, even though all workers were working at home. Thus, two thirds of the initial productivity gap was due to worker selection.

Takeaways by Macro Roundup® AI

  1. Hourly calls of on-site workers who went remote around Covid-19 office closures fell 4% relative to already-remote workers at an American Fortune 500 firm, indicating negative treatment effects accounted for one third of the productivity gap.
  2. After offices closed and all workers were at home, employees who had initially chosen remote jobs were 8% less productive than those who initially chose on-site jobs, attributing two thirds of the initial gap to worker selection.
  3. Data from an American Fortune 500 firm that hired both remote and on-site workers before Covid-19 separates how remote work affects productivity from how productive the workers who choose remote jobs are.

AI Summary. Nearly one in four people in Canada are immigrants, the largest share among the Group of Seven nations. At its current pace of population growth, Canada — the smallest G-7 country by population — would double its residents in about 26 years and exceed Italy, France, the UK and Germany.

Randy Thanthong-Knight Bloomberg
Date Posted:

Canada’s population is now 40mm people, nearly 25% of them born abroad as Canada’s population growth rate hits 2.7% the highest among advanced economies. @markets

Does mass immigration give Canada an edge in the global labor race?

Core argument: Nearly one in four people in Canada are immigrants, the largest proportion among the Group of Seven nations.

Nearly one in four people in Canada are now immigrants, the largest proportion among the Group of Seven nations. At the current pace of growth, the smallest G-7 country by population would double its residents in about 26 years, and surpass Italy, France, the UK and Germany by 2050.

Takeaways by Macro Roundup® AI

  1. Nearly one in four people in Canada are immigrants, the largest proportion among the Group of Seven nations.
  2. At its current pace of growth, Canada, the smallest G-7 country by population, would double its number of residents in about 26 years.
  3. Canada's population is projected to surpass those of Italy, France, the UK and Germany by 2050.

AI Summary. The S&P 500 index and net Federal Reserve bond-buying are highly correlated, which the author argues makes central bank liquidity a crucial driver of stock prices. On that view, continued balance-sheet shrinkage raises downside risks for equities.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk @apolloglobal notes a high correlation between Fed net QE and the S&P500. He suggests that Fed liquidity provided through the Bank Term Funding Programs has been a crucial driver of the stock market.

Does central bank liquidity drive stock prices?

Core argument: The S&P 500 has risen more than 10% since the collapse of Silicon Valley Bank, a period in which the Federal Reserve has been adding liquidity.

Since SVB collapsed, the Fed has been adding liquidity, and the S&P500 is up more than 10%. The high correlation between Fed net QE and the S&P500 seen in the chart below suggests that Fed liquidity is a crucial driver of the stock market. With the Fed turning more hawkish and continuing QT, the downside risks to equities are growing.

Takeaways by Macro Roundup® AI

  1. The S&P 500 has risen more than 10% since the collapse of Silicon Valley Bank, a period in which the Federal Reserve has been adding liquidity.
  2. The high correlation between Fed net quantitative easing and the S&P 500 suggests that Fed liquidity is a crucial driver of the stock market.
  3. With the Federal Reserve turning more hawkish and continuing quantitative tightening, the downside risks to equities are growing.

AI Summary. A report from a Texas water conservation district shows water levels in the Ogallala Aquifer, spanning eight U.S. High Plains states, have dropped consistently over the past five years. The aquifer supplies water for about 30% of U.S. irrigation, farms producing a quarter of national agricultural output, and drinking water for 82% of residents within its boundaries.

Jayme Lozano Carver The Texas Tribune
Date Posted:

Water levels in the Ogallala Aquifer which provides water for 30% of the US’s irrigation systems has fallen consistently for the past five years. @TexasTribune

Water levels in the Ogallala Aquifer which provides water for 30% of the US’s irrigation systems has fallen...

Are water levels in a major farm-belt aquifer declining?

Core argument: The Ogallala Aquifer supplies water for about 30% of U.S. irrigation systems, supporting farms and ranches that account for a quarter of national agricultural production.

On the heels of Texas’ worst drought in a decade, a report from the High Plains Underground Water Conservation District shows water levels in the Ogallala Aquifer, also known as the High Plains Aquifer, have dropped consistently in the region over the last five years. With only a finite amount of water to be shared throughout the U.S. High Plains region — Texas, Colorado, New Mexico, Kansas, Nebraska, Oklahoma, Wyoming and South Dakota — the Ogallala running dry could have devastating consequences nationwide. The aquifer provides water for about 30% of the nation’s irrigation systems, boosting up the farms and ranches that supply a quarter of the nation’s agricultural production. And for 82% of the people who live within the aquifer’s boundaries, it supplies their drinking water too.

Takeaways by Macro Roundup® AI

  1. The Ogallala Aquifer supplies water for about 30% of U.S. irrigation systems, supporting farms and ranches that account for a quarter of national agricultural production.
  2. A report from the High Plains Underground Water Conservation District shows Ogallala Aquifer water levels in its Texas region declined consistently over five years, following Texas' worst drought in a decade.
  3. The Ogallala Aquifer provides drinking water for 82% of the people living within its boundaries, which span Texas, Colorado, New Mexico, Kansas, Nebraska, Oklahoma, Wyoming and South Dakota.

AI Summary. US venture capitalists have backed more than 200 defence and aerospace deals worth nearly $17bn in a five-month span, exceeding the sector's total annual fundraising in 2019, according to PitchBook data. US venture investment in defence start-ups rose from under $16bn in 2019 to $33bn in 2022.

Tabby Kinder Financial Times
Date Posted:

In the first five months of 2023, US venture capital funds invested nearly $17B in more than 200 deals. This was more than the sector raised in all of 2019. @PitchBook

Is venture capital investment in defence start-ups rising sharply?

Core argument: US venture capitalists agreed more than 200 defence and aerospace deals worth nearly $17bn in the first five months of this year, exceeding what the sector raised during all of 2019, according to PitchBook data.

US venture capitalists have agreed more than 200 defence and aerospace deals in the first five months of this year worth nearly $17bn — more than the sector raised during the entire of 2019, according to data from PitchBook. US venture investment in defence start-ups surged from under $16bn in 2019 to $33bn in 2022, PitchBook data shows. Investors piled a record $14.5bn into such start-ups in the first quarter of this year.

Takeaways by Macro Roundup® AI

  1. US venture capitalists agreed more than 200 defence and aerospace deals worth nearly $17bn in the first five months of this year, exceeding what the sector raised during all of 2019, according to PitchBook data.
  2. PitchBook data show US venture investment in defence start-ups rose from under $16bn in 2019 to $33bn in 2022.
  3. Investors put a record $14.5bn into defence start-ups in the first quarter of this year, according to PitchBook.

Wednesday, June 21, 2023

AI Summary. The authors recalculate the Cost of Thriving Index and estimate the cost of supporting a family on one male earner's wages rose by just over 10 weeks of work rather than 22 weeks. Accounting for federal taxes—including the child tax credit—and quality improvements in health care and cars, they estimate the cost is now lower than in 1985.

Scott Winship and Jeremy Horpedahl American Enterprise Institute
Date Posted:
Is Database:
Database

.@swinshi @AEIecon finds faults with @oren_cass analysis and argues that it has become easier for a male earner to support a family than it was in 1985. @jmhorp @JonahDispatch

Has the cost of supporting a family on one earner's wages fallen?

Core argument: Correcting the dollar costs in Oren Cass's Cost of Thriving Index, the authors find the cost of thriving for male workers rose by just over 10 weeks of work since 1985, not the 22 weeks Cass reports.

We find that it has become easier for a male earner to support a family than it was in 1985. We correct the dollar costs of the Oren Cass' Cost of Thriving Index (COTI) and find that instead of rising by 22 weeks of work, the cost of thriving (for male workers) rose by just over 10 weeks. This improved estimate overstates the increase in COTI, however. Cass’s way of measuring “costs” fails to account for quality improvement in the items he tracks—particularly better health care and nicer cars.  Furthermore, COTI does not take into account taxes—a major flaw. It’s especially important in this case because the kind of family Cass is describing has seen a major reduction in its federal tax burden since 1985, going from a net taxpayer to receiving a subsidy, primarily due to the child tax credit (CTC). After including estimates of the federal tax burden or tax subsidy in both years, we find that the 2022 cost of thriving for a family with one male earner is lower than it was in 1985.

Takeaways by Macro Roundup® AI

  1. Correcting the dollar costs in Oren Cass's Cost of Thriving Index, the authors find the cost of thriving for male workers rose by just over 10 weeks of work since 1985, not the 22 weeks Cass reports.
  2. After including estimates of the federal tax burden or subsidy in both years, the authors find the 2022 cost of thriving for a family with one male earner is lower than in 1985.
  3. The authors argue the Cost of Thriving Index omits taxes and quality improvements in the items it tracks, such as health care and cars, while the family Cass describes shifted from net taxpayer to subsidy recipient, primarily via the child tax credit.

AI Summary. U.S. national assessment scores for 13-year-olds declined 4 points in reading and 9 points in mathematics from the prior assessment, and 7 and 14 points respectively compared with a decade earlier. Mathematics declines were larger for lower-performing students (12–14 points) than for middle- and higher-performing students (6–8 points).

NCES Staff National Center for Educational Statistics
Date Posted:
Is Database:
Database

America’s 13-year-olds test scores declined significantly between 2019-2020 and last school year. The mean 13-year-old lost 4pp in reading and 9pp in math a loss of 2.7% over a decade in reading and 5% in math.

Are student reading and math scores falling, most for low performers?

Core argument: Average NAEP long-term trend scores for 13-year-olds fell 9 points in mathematics and 4 points in reading between the 2019–20 and 2022–23 administrations, and 14 and 7 points respectively compared with a decade earlier.

The National Center for Education Statistics (NCES) administered the NAEP long-term trend (LTT) reading and mathematics assessments to 13-year-old students from October to December of the 2022–23 school year. The average scores for 13-year-olds declined 4 points in reading and 9 points in mathematics compared to the previous assessment administered during the 2019–20 school year. Compared to a decade ago, the average scores declined 7 points in reading and 14 points in mathematics. The 2023 mathematics scores for age 13 students at all five selected percentile levels declined compared to 2020. The declines ranged from 6 to 8 points for middle- and higher-performing students to 12 to 14 points for lower-performing students, with larger declines for lower performers in comparison to their higher-performing peers. The percentage of students who reported missing 5 or more days doubled from 5 percent in 2020 to 10 percent in 2023.

Takeaways by Macro Roundup® AI

  1. Average NAEP long-term trend scores for 13-year-olds fell 9 points in mathematics and 4 points in reading between the 2019–20 and 2022–23 administrations, and 14 and 7 points respectively compared with a decade earlier.
  2. Mathematics scores for 13-year-olds declined at all five selected percentile levels relative to 2020, with drops of 12 to 14 points among lower-performing students versus 6 to 8 points for middle- and higher-performing students.
  3. The share of 13-year-olds reporting they missed 5 or more school days doubled from 5 percent in 2020 to 10 percent in 2023, according to the National Center for Education Statistics.

AI Summary. Phoenix-area suburbs are paying sharply higher prices for water rights from a basin west of the city, with one suburb approving $80m for 6,000 acre-feet — more than double the per-acre-foot price another suburb paid earlier. Arizona's groundwater replenishment assessments rose from $154 to $768 per acre-foot.

Leslie Kaufman, Jeremy Lin, and Linda Poon Bloomberg
Date Posted:

The price of water in Arizona is rising. Some cities are finding the price per acre-foot has doubled since 2021. @markets

Are desert suburbs paying sharply rising prices for water rights?

Core argument: Buckeye, a Phoenix suburb, approved paying $80 million for 6,000 acre-feet of Harquahala basin water, more than double the per-acre-foot price Queen Creek paid in its 2021 purchase of 5,000 acre-feet for $30 million.

In 2021 Queen Creek, [a high-end suburb of Phoenix] paid $30 million for 5,000 acre-feet of water [from] Harquahala, a basin west of Phoenix. It’s negotiating for another 8,000 acre-feet there, though the cost will likely be much higher this time around: Buckeye, [another Phoenix suburb,] approved paying $80 million for 6,000 acre feet from the same area in January.  That’s more than double what Queen Creek paid in 2021. In 1993 the state created the Central Arizona Groundwater Management Replenishment District (CAGRD). Communities would pay to pump water and in return the agency would replenish what they took out with water from the Colorado or other rivers. Households in the district pay bills for water and separate assessments for groundwater replenishment. Those rates have already gone from $154 per acre-foot in 2002 to $768 per acre-foot in 2021.

Takeaways by Macro Roundup® AI

  1. Buckeye, a Phoenix suburb, approved paying $80 million for 6,000 acre-feet of Harquahala basin water, more than double the per-acre-foot price Queen Creek paid in its 2021 purchase of 5,000 acre-feet for $30 million.
  2. Queen Creek is negotiating for another 8,000 acre-feet from the Harquahala basin west of Phoenix, where the cost will likely be much higher than in its 2021 deal.
  3. Groundwater replenishment assessments charged by Arizona's Central Arizona Groundwater Management Replenishment District, created in 1993 to replenish pumped groundwater with water from the Colorado or other rivers, rose from $154 per acre-foot in 2002 to $768 in 2021.

AI Summary. Europe's slowdown in GDP per capita growth reflects weaker productivity growth and aging, partly offset by rising labor force participation and hours worked. Gross changes in these growth components between 1979–1999 and 1999–2019 were large but largely offsetting, leaving a net decline of roughly 1 percentage point for most of Europe.

Dietrich Vollrath Economic Growth Blog
Date Posted:
Is Database:
Database

.@DietzVollrath notes that a rise in labor force participation prevented what would have been a dramatic decline in European growth from 1999-2019, given Europe’s population aging and productivity slowdown.

Why has Europe's GDP per capita growth slowed?

Core argument: Europe's net slowdown in GDP per capita growth between 1979–1999 and 1999–2019 was on the order of one percentage point for most countries, despite massive gross changes in the underlying growth components.

The story of the slowdown in Europe is about productivity growth and aging, but with substantial offsets coming from LFP and hours. Changes in labor market activity, in general, prevented the slowdown in Europe from being even more devastating. The gross changes in the components of growth (productivity, labor force participation, etc..) were massive in Europe between 1979-1999 and 1999-2019. They turned out to offset each other in many cases so that the net change in the growth rate of GDP per capita was "only" on the order of minus 1 percentage point for most of Europe.

Takeaways by Macro Roundup® AI

  1. Europe's net slowdown in GDP per capita growth between 1979–1999 and 1999–2019 was on the order of one percentage point for most countries, despite massive gross changes in the underlying growth components.
  2. Productivity growth and aging account for Europe's slowdown, with substantial offsets from labor force participation and hours worked.
  3. Changes in labor market activity prevented Europe's slowdown from being even more devastating, as gross shifts in the components of growth offset each other in many cases.

Related Articles:

  • Fully Grown – European Vacation! — Europe's growth slowdown reflects a widespread drop in productivity growth rather than changes in physical capital accumulation, with human capital growth also mattering but varying by country. The productivity decline is larger than in the US: in countries such as the UK and France, productivity growth fell from about 2% to near zero or negative.