Calls for the ECB to raise rates to stem inflation have missed the negative impact of ‘structural reforms’ of labour markets on innovation.
Christoph Stein: You conclude from your research that supply-side labour market reforms have impaired innovation and labour productivity growth in major OECD countries. Why should labour market institutions influence innovation and productivity? There are a number of arguments from neighbouring disciplines, such as organizational psychology, that labour market institutions matter when it comes to processes […]
Do you still remember the story about the New Machine Age? Figure 1 (below) can help you stop dreaming: Growth rates of labour productivity (i.e. value added per working hour) in the US, Japan and Europe have never since 1945 been as low as during the past ten years! Remember that value added is identical […]