AG on globalization

Seth Ackerman SAckerman at
Wed Aug 30 14:10:46 PDT 2000

Brad DeLong wrote:

> >[Layoffs promote employment, says AG. "The second derivative of
> >output per hour still appears to be positive." Next year in Jackson
> >Hole!]
> Well, Alan Greenspan said that employment-at-will promotes cost
> savings from taking advantage of technological change, that faster
> adoption of new technologies means higher productivity growth, that
> higher productivity growth means faster warranted real wage growth,
> that faster warranted real wage growth means that the sustainable
> average unemployment rate that keeps actual real wage growth equal to
> warranted real wage growth is lower...

Hello, Brad. Welcome back from the heartland.

So, if employment-at-will has enabled companies to take advantage of new technologies, why has there been no structural acceleration of productivity growth in 90 percent of the US economy, as Prof. Gordon tells us? And if employment-at-will does nothing to help nine tenths of American industry, why do we need it?


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