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Britain’s Productivity Gap with the United States and Europe: A Historical Perspective

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  • Stephen Broadberry

    (Department of Economics, University of Warwick, Coventry CV4 7AL, S.N.Broadberry@warwick.ac.uk)

  • Mary O’Mahony

    (National Institute of Economic and Social Research, m.omahony@niesr.ac.uk)

Abstract

Since the mid-1990s, an almost universal belief has developed amongst economic commentators that the United States has undergone a productivity miracle and that European economies are now suffering from chronic sclerosis. As a result, the ‘American model’ dominates the agenda of policy towards growth and productivity performance in Britain. This paper urges caution here, given the disappointing experience of earlier British growth policies based on borrowing from the fashionable economy of the moment, including the Japanese and German economies during the 1970s and 1980s, and the American economy (again) during the 1950s and 1960s. A historical perspective suggests that: (1) successful productivity performance requires a stable institutional framework for long-term investments in human and physical capital, which the European model has been particularly good at providing over the last half century; (2) a country is constrained by its geography, so that copying without adaptation to local circumstances is rarely a good policy; (3) it is important to pay attention to the different sectors of the economy when formulating policy.

Suggested Citation

  • Stephen Broadberry & Mary O’Mahony, 2004. "Britain’s Productivity Gap with the United States and Europe: A Historical Perspective," National Institute Economic Review, National Institute of Economic and Social Research, vol. 189(1), pages 72-85, July.
  • Handle: RePEc:sae:niesru:v:189:y:2004:i:1:p:72-85
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    Cited by:

    1. Julie Froud & Colin Haslam & Sukhdev Johal & Karel Williams, 2020. "(How) does productivity matter in the foundational economy?," Local Economy, London South Bank University, vol. 35(4), pages 316-336, June.
    2. Morgan, Horatio M., 2024. "An Integrative Institutional Framework on the Canada-U.S. Business Performance Gap," MPRA Paper 119739, University Library of Munich, Germany.
    3. Davide Castellani & Mariacristina Piva & Torben Schubert & Marco Vivarelli, 2018. "The source of the US /EU Productivity Gap:Less and less effective R&D," LEM Papers Series 2018/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Castellani, Davide & Piva, Mariacristina & Schubert, Torben & Vivarelli, Marco, 2019. "R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 279-291.
    5. Jim Campbell & Ailsa Mckay & Emily Thomson, 2005. "How ‘Modern’ is the Modern Apprenticeship?," Local Economy, London South Bank University, vol. 20(3), pages 294-304, August.

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