Challenging the Narrative of European Decline

> Yet productivity growth as conventionally measured has in fact been much faster in the US than in Europe. How can this be consistent with the fact that there has been virtually no change in the relative value of goods produced per hour? That’s the apparent US-Europe paradox. What explains it is the fact that the US and European economies produce different mixes of goods – a qualifier that is not picked up in the conventional measures of productivity. And that difference in mixes of goods affects the prices at which productivity measures should be calculated in order to make a meaningful comparison across countries

One of the most important things to recognize is that the vernacular meaning of "productivity", which would be something to do with how hard people work and how many widgets they turn out, is not the same as the technical economic term "productivity", which is roughly GDP divided by hours worked. This causes a lot of discourse with people talking past each other.

The examples relate to tech companies. If you think about, say, Youtube, that (a) contributes a lot to US GDP and (b) doesn't cost European consumers all that much. Indeed, a lot of stuff produced by Silicon Valley is ""free"" (ad-supported or free tier) at the point of use.

This is before we get into complicated cases like international attribution of revenue, such as Apple Ireland.

That does not seem to ring true. 175k people die annually of heat in Europe.

https://www.who.int/europe/news/item/01-08-2024-statement--h...

> 10% of the US economy is IT

The US is the IT-supplier of the world. I don't know how large a % of that comes for outside the US. But with all the 'shenanigans' of the Trump regime and the trust the US has lost due to that, that should lead to losing IT business from the rest of the world.

In other words, If Europe would disavow using US IT, as would be the wise choice I think, then Europe might close the gap.

I just hope this is not just wishful thinking though.

I am unaware of the US situation, but there are vast differences in housing quality across Europe. Compare the Netherlands, even bad parts of the countryside, to the Greek or Romanian countryside. WTF! And where you'd need air conditioning (Southern Italy, Sicily, Southern Greece) you won't find air conditioning, outside of some very rich enclaves (like parts of Malta, a small part of Sicily, some Greek and Adriatic Islands). And there's 1 reason for that: they can't afford it.

And if we're being entirely honest ... most large European cities I've seen certainly could benefit from having half thrown down and rebuilt. As well as essentially all of the smaller ones.

And as for one of Paul Krugman's comment "Americans, however, have more stuff, that is, material goods: Our houses and cars, in particular, are much bigger. Europeans, on the other hand, have more time ..."

That's not because Europeans don't want big houses, don't want infinite stuff. In very large parts of Europe they can't afford it. And they certainly want more and longer jobs. They just can't find jobs that pay enough to justify giving up free time. But would they work, say, 44 hours per week for a 15-20% raise? (because it's 15-20% more compared to a 38 hour week) I know people that wouldn't, but I also know people that would love such an opportunity.

Its interesting that voices going on about European decline gets louder and louder the more the US slips into fragmentation, autocracy, debt, lower life expectancies, trust, and so on.