Europe Productivity

Macroblog sneers at Europe for their "productivity bust". The graph indeed shows American productivity growth catching up and then exceeding Europe's since the mid 90's. US productivity growth has been steadily accerating while Europe is decelerating.

Last year the Economist published a good rebuttal to this argument that US productivity growth has out done Europe. Key points:

• Europe GDP per capita growth 1.8% vs. USA GDP per capita growth 2.1%
• That small difference can be explained by Germany's lone performance
• Productivity figures are incomparable. Europe's include public sector. Also, there are differences in GDP calculation
  
• Europeans take more leisure, Americans more income. The preference for leisure over income might be explained by higher marginal tax rates. Average GDP per hours worked is very close in both regions. (I'd suspect higher unemployment rates are involved here as well).