4.2% Unemployment

[Max Sawicky]

>>
While the lower unemployment rate and the greater proportion of the working
age population employed in the US than in Europe is well recognized, Martin
Wolf noted in yesterday's Financial Times that total factor productivity in
the 1990s has also risen faster in the US at 1.1% year, than in the Euro
zone, at .7% per cent.

Any comments on what total factor productivity measures, its significance,
its seemingly low level in both the US and the Euro zone? . . . >>

I don't follow the productivity stuff closely, but my
mates here tell me and the world that in this and other
measures, the EU has compared favorably with the U.S.
Methinks the development you note is relatively recent,
so it wouldn't do to make too much of it.

The unemployment rate is the big exception, though in
this case the gaps are less than implied by official
figures, owing to different underlying definitions and
other factors that distort superficial comparisons.

A key point about Germany is that of the gross gap
between West and East.  Germany's overall stats mask
what I would call a development problem (i.e., 
integrating with the East), not a problem of the
formerly West German, traditionally capitalist
economy.

mbs