In early 2005 I argued in this column that the eurozone productivity growth deficit on the US was smaller than the consensus believed and that it would narrow. I reckoned that US labour productivity had received an outsized cyclical boost from asset-price bubbles. This boost would not last.
It seems that my prediction is being borne out. The US-eurozone productivity growth differential has narrowed significantly in the past two years. In the past quarter, eurozone labour productivity (based on output per hours worked) grew by 1.5%
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