I find this chart fascinating. Most of all the post financial crisis divergence. It looks as if the GFC drove a positive productivity shock in the US, but a negative shock in Europe. - ThreadSky

xvrmdf.bsky.social • 84 days ago

I find this chart fascinating.

Most of all the post financial crisis divergence.

It looks as if the GFC drove a positive productivity shock in the US, but a negative shock in Europe.

Comments

8-bit-geek.bsky.social•84 days ago

It’s crazy what happened. Seems like almost everything became automated here

xvrmdf.bsky.social•84 days ago

Maybe Europe simply didn't run large enough deficits after the financial crisis.

duncanlamont2.bsky.social•84 days ago

Add some forecasts into the mix and jfc

brokenbanker.bsky.social•84 days ago

skew to big tech with much higher ROIC in the US vs. Europe and UK ? plus the way the US handled their financial sector recap compared with Europe and the UK. no idea of precise numbers, but those 2 factors must be the bulk of this divergence, no ?

theredcount.bsky.social•84 days ago

I have no idea how this enters into the statistics but I would be surprised if energy costs aren't a factor.

xvrmdf.bsky.social•84 days ago

Financial sector recap a good point.

I think big tech might be important in the trend divergence post 2010/11, but I don't how that can explain the productivity moving in *opposite* directions in the teeth of the GFC.

domw.bsky.social•84 days ago

I suspect (tho can’t prove) that greater access to capital markets financing has played a role here too.

davedaveson.bsky.social•84 days ago

I suspect it’s greater access to the US treasury.

brokenbanker.bsky.social•84 days ago

guess my thought on that would be much easier and faster for US firms to cut staff and costs (certainly compared to Europe); so US non-farm productivity as measured by output/hours goes up, as remaining labour gets massively sweated and delivers for fear of losing employment as the crisis unfolds ?

domw.bsky.social•84 days ago

Yeah, this is exactly right. It wasn’t unlike the pandemic effect, when furlough schemes kept people in jobs despite not doing anything, vs checks being mailed to people in the US and firms laying off workers.

davidgarciaspai.bsky.social•84 days ago

Come on. We all know it is due to USD being massively overvalued and huge Communist debt issuance. When US now goes bankrupt AND EURUSD goes to its real 2.75 rate, let’s revisit

xvrmdf.bsky.social•84 days ago

A very compelling theory.

hivernage.bsky.social•84 days ago

There was also a European debt crisis, a Brexit, a different approach to Covid (saved lives but hurt the economy) and the war in Ukraine combined with an energy transition.

rickchasey.bsky.social•84 days ago

You do wonder if the post GFC Euro regs have choked off access to capital to the extent to which it’s harmed productivity growth.

Obviously more complex etc etc