ABSTRACT
The importance of productivity growth in terms of its short-run influence on the economy may well have been exaggerated. Productivity gains amounting to half a percentage point per annum are exceedingly difficult to achieve, and a change of that magnitude can have little immediate power to bring down a disturbingly rapid rate of inflation or to reverse a deplorably resistant foreign trade imbalance. The industrial market economies began to draw ever closer to US levels of productivity and per capita income. The Marshall Plan rested on the premise that US assistance to other countries, designed to help them on the way to prosperity, was an act of enlightened self-interest. The job destruction rate is measured similarly as the total employment decreases by declining plants as a fraction of employment. Large-scale employment reductions by some plants in a sector are offset by large-scale employment increases by others.
