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Chapter 9 Global Economic Growth and Development
Productivity Growth in the United States since 2002
Productivity is the major driver of economic growth in the United States, accounting for about half of the
increase in real GDP over time. Between 1996 and 2001, productivity showed no trend and averaged
about 2.7 percent. In 2002, productivity increased to 4.1 percent and then declined to 1.0 percent by 2014.
Is Official Labor Productivity Overstated?
According to the U.S. Bureau of Labor Statistics (BLS), U.S. labor productivity has increased by nearly
40 percent since 2000. To obtain the data used to create labor productivity measures, the BLS surveys
The Productivity Paradox
In the course of a book review he wrote in 1987, Nobel economist Robert Solow made the offhand
mputer age everywhere but in the prod
gains from information technologies. For example, widespread adoption of information technologies in
service industries was supposed to allow these industries to reap big efficiency gains. Bar coding of
532 Miller Economics Today, Nineteenth Edition
Japan and Germany Save and Invest More Than the United States,
But Does It Matter?
Japan and Germany have saving rates that are substantially higher than the U.S. rate. As a result, they
have accumulated more capital. On a per capita basis, Japan has about 22 percent more invested capital
than the United States, and Germany has 13 percent more. Nevertheless, the United States creates more
wealth per capita. In 2000 dollars, the United States created $29,950 in new wealth per capita, compared
to $23,600 for Japan and $23,600 for Germany.
The Labor Productivity Boom in Manufacturing
Among the industries that manufacture physical goods, labor productivity has increased steadily over the
years. In many manufacturing industries, production tasks that once took two weeks and a dozen workers
Our High-Tech Economy
Four decades ago, one in six American businesses was automotive-related. In 2012, autos and light trucks
accounted for about 2 percent of GDP. So does spending on computers and related equipment. Yet despite
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