GDP, M&A, EBITDA, P/E, NASDAQ, Econo-thread Part 12

[DanS]

" Actually I haven't been following most of the current posts, I didn't realize the debate was a US vs. Europe productivity piss fest."

Colon and ef started it! And even if they didn't, it was a pre-emptive strike on my part!

"But I did see the exchange rate argument somewhere again."

Well that's somewhat new. This is an interesting area.

"I thought we were in the middle of record productivity gains."

Well '01 wasn't that hot, IIRC. But productivity growth was resilient through the recession, which is rare.

[Ted Striker]

Well that's somewhat new. This is an interesting area.

Well, I think I recall that Roland has brought up the exchange rate idea every thread since '99.

[DanS]

Not in the broadest context. More in the unsustainability of the current account deficit. Of course, he's mentioned that the Dollar was overvalued.

[Ted Striker]

I'm pretty positive it was regarding productivity and GDP per capita specifically, though.

[DanS]

Maybe you're right and I just ignored it.

My view of it is that the currency conversion GDP should be used as a reality check on the PPP numbers. I am somewhat skeptical of how fine-grained the 5x GDP PPP factor for China is, or what it really tells us, for instance.

[Ted Striker]

Well, after the first one, it all turns into noise to me.

[el freako]

DanS is probably correct in saying that the US productivity has improved since the 1974-95 period, indeed since the mid 1990's european productivity has slowed so that they have 'met each other coming the other way'.

Now faster productivity growth is nice, it leads (eventually) to higher real wages - but what is interesting is that whilst the US underwent it's productivity 'miracle' it seemed to lose it's previous 'jobs miracle' - this can clearly be seen by the fact that the underlying rate of growth in the US has not improved since the 1970's and 1980's (it's still around 3% a year).
Meanwhile Europe is undergoing it's largest rise in employment and labour-force participation since comprehensive records began in the early 1960's - however it is also undergoing a slowdown in productivity growth, this is very much like what happened in the US in 1974-90.



Here is some of the background data comparing the 1979-90 cycle to the 1990-2000 one:

United States:
Labour force participation: 70.5% in 1979, 76.3% in 1990, 75.3% in 2000
Employment: 66.4% in 1979, 72.0% in 1990, 71.3% in 2000
Employment growth: 1.7% in 1979-90, 1.3% in 1990-2000
Hours worked growth: 1.7% in 1979-90, 1.3% in 1990-2000
Hours worked per person aged 15-64: 0.7% in 1979-1990, -0.1% in 1990-2000
Productivity (GDP per hour): 1.2% in 1979-90, 1.9% in 1990-2000
Trend GDP (using D-P function): 3.1% in 1979-90, 3.0% in 1990-2000

European Union:
Labour force participation: 67.2% in 1979, 67.6% in 1990, 70.1% in 2000
Employment: 63.8% in 1979, 62.5% in 1990, 65.3% in 2000
Employment growth: 0.5% in 1979-90, 0.5% in 1990-2000
Hours worked growth: 0.0% in 1979-90, 0.1% in 1990-2000
Hours worked per person aged 15-64: -0.7% in 1979-1990, 0.0% in 1990-2000
Productivity (GDP per hour): 2.3% in 1979-90, 2.0% in 1990-2000
Trend GDP (using D-P function): 2.4% in 1979-90, 2.3% in 1990-2000

Japan:
Labour force participation: 71.7% in 1979, 74.1% in 1990, 78.2% in 2000
Employment: 70.2% in 1979, 72.6% in 1990, 74.2% in 2000
Employment growth: 1.2% in 1979-90, 0.3% in 1990-2000
Hours worked growth: 0.8% in 1979-90, -0.8% in 1990-2000
Hours worked per person aged 15-64: -0.1% in 1979-90, -0.9% in 1990-2000
Productivity (GDP per hour): 3.2% in 1979-90, 2.3% in 1990-2000
Trend GDP (using D-P function): 3.9% in 1979-90, 1.7% in 1990-2000


bear in mind that a straight comparison between GDP and productivity growth rates in the US and those in the EU and Japan will probably result in an understating of EU and Japanese growth by 0.3% to 0.5% a year, this is due to the different methods used for calculating inflation (and thus growth).

[TCO]

Freako,

1. Instead of just dumoping the statistics, how about making your point?

2. wrt the corrections you are using, I still suspect that volatility is a different issue (but I'm not that heavy on what you are doing). If its not a seperate issue, you should be able to time average things or something to show that your corrections just affect volatility rather than claiming Saharan ice= Arctic ice.

[Agathon]

Anyone every wondered how much natural altruism is required to support a voluntary (i.e. Libertarian) taxation system?

It seems to me that Prisoner's Dilemma situations create a real problem for voluntary tax systems, just like they do for other "voluntary" codes of conduct. That is unless we can expect a high degree of altruism from the citizens. If not, then "hello Hobbes!"

I've been arguing this in another thread, but GP keeps asking me to post on this one (perhaps Berzerker fears to tread here).I'm assuming you all know what I'm talking about re: PD since the standard of this thread seems to be pretty high.

[Ted Striker]

Hi Agathon,

This is the most educated thread in all of Apolyton by light years.

These guys all talk over my head with specific statistical measures, but any sort of knowledge level is welcome. And it's also a nice change of pace to have some short general idea level posts to break the monotony of the statisical arguments which can be pretty dry.

You seem a couple of steps ahead of me in terms of intelligence so if I can post here, I'm sure you will have no problems.

[TCO]

Originally posted by Agathon
Anyone every wondered how much natural altruism is required to support a voluntary (i.e. Libertarian) taxation system?

It seems to me that Prisoner's Dilemma situations create a real problem for voluntary tax systems, just like they do for other "voluntary" codes of conduct. That is unless we can expect a high degree of altruism from the citizens. If not, then "hello Hobbes!"

I've been arguing this in another thread, but GP keeps asking me to post on this one (perhaps Berzerker fears to tread here).I'm assuming you all know what I'm talking about re: PD since the standard of this thread seems to be pretty high.

Oh...don't post the same crap. We've all done the natural rights one to death. Talk some Nash Equilibrium if you want to get geeky on the Game Theory. That will get me off.

[Ted Striker]

get me off

Ohhhhh oohhhhh I just saw an outlier on your equilibrium chart...ohhh..


Ya, I'd have to agree, there are about 10 Lib-related threads hanging around here.

[TCO]

aaaaah.

[DrSpike]

It is not that natural to invoke PD, which is most often a 2-player game. It is just a bog-standard free rider problem.

[TCO]

Did somebody let you out of the Community section?