Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- List of conference participants
- 1 Introduction
- PART ONE GENERAL POLICY ISSUES
- PART TWO DEMAND MANAGEMENT AND SUPPLY-SIDE POLICY
- PART THREE SUBSIDISING EMPLOYMENT AND TRAINING
- PART FOUR LABOUR MARKET REGULATIONS
- PART FIVE POLICY, JOB REALLOCATION AND THE UNEMPLOYMENT–PRODUCTIVITY RELATION
- 14 Is there a trade-off between unemployment and productivity growth?
- Discussion
- 15 Gross job reallocation and labour market policy
- Discussion
- Discussion
- PART SIX COMPARING UNEMPLOYMENT POLICIES
- Index
14 - Is there a trade-off between unemployment and productivity growth?
Published online by Cambridge University Press: 07 September 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- List of conference participants
- 1 Introduction
- PART ONE GENERAL POLICY ISSUES
- PART TWO DEMAND MANAGEMENT AND SUPPLY-SIDE POLICY
- PART THREE SUBSIDISING EMPLOYMENT AND TRAINING
- PART FOUR LABOUR MARKET REGULATIONS
- PART FIVE POLICY, JOB REALLOCATION AND THE UNEMPLOYMENT–PRODUCTIVITY RELATION
- 14 Is there a trade-off between unemployment and productivity growth?
- Discussion
- 15 Gross job reallocation and labour market policy
- Discussion
- Discussion
- PART SIX COMPARING UNEMPLOYMENT POLICIES
- Index
Summary
Introduction
The transatlantic divide
Over the past decade there has been a steady divergence in the interests of European and American macro and labour economists. Persistently high unemployment in Europe has held centre stage in the concerns of Europeans, and little consensus has emerged regarding the share of blame to be attributed to cyclical or structural factors, nor on the particular mix of structural factors to be held responsible. In the USA, by contrast, there is near total agreement that fluctuations in unemployment have been cyclical in nature, and that the underlying ‘Non-Accelerating Inflation Rate of Unemployment’ (NAIRU) has changed little over the past two decades. Since there are few puzzles in the behaviour of unemployment, American economists have increasingly shifted their emphasis toward the view that the central problems of the US economy are (i) slow growth in productivity and in real wages, and (ii) an increasing dispersion of the income distribution that has resulted in an absolute decline in real wages for workers below the 20th or even the 50th percentile (depending on the exact measure used).
This chapter explores the hypothesis that the divergence of emphasis across the Atlantic is misplaced, and that the apparently separate problems of high unemployment in Europe and low productivity growth in America may be interrelated. Is there a trade-off between low unemployment and high productivity growth? If so, what factors have caused Europe and America to move to different positions on the unemployment–productivity trade-off (UPT) schedule?
- Type
- Chapter
- Information
- Unemployment PolicyGovernment Options for the Labour Market, pp. 433 - 463Publisher: Cambridge University PressPrint publication year: 1997
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