OECD.org Article - The Real Economy: revisiting underlying productivity fundamentals

The real economy and the crisis: revisiting productivity fundamentals

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This article notes the lack of real-time feedback on productivity figures and seems to suggest that with these to hand, crises might be better forecast in the future.

Thus - it seems to say - the current crisis may arise not simply from the simplistic reason of the collapse of the sub-prime mortgage market, but because of a complex linkage of reasons associated with productivity in production.

ONQ.

Re: OECD.org Article - The Real Economy: revisiting underlying productivity fundament

I agree, the sub prime market was just the straw that broke the camels back. Everything in the last 20 to 30 years was leading up to a financial crisis: excessive public and private prime debt, excessive budget deficits, political promises of an easy life for all, too low interest rates, too much monetary inflation, the list goes on and on.

Real-time data on productivity would be available in a totally free market economy, where there is not a group of people (elected or not) trying to second guess market data and manipulate interst rates, money supply and certain industries.
The real problem is the economic data that is being used to make things look rosy. E. g. GDP, it measures the economic output of domestic enterprises (discounted in fancy ways for public spending and price inflation). In the US especially, many domestic companies have outsourced production outside the US, but the entire revenue of the domestic companies is added to GDP, even when production takes place abroad. This results in economic data looking like fewer people are producing more, i.e. higher productivity.