Europe needs to close the gaping productivity gap with the U.S. if it is to compete in the modern economy.
That’s the warning that Sweden’s central bank boss Erik Thedéen has for both his country and the rest of the continent, only a day after the Riksbank governor took the initiative to raise interest rates before the Fed, signaling a possible divergence in monetary policy across the Atlantic.
“They are outperforming Europe, including Sweden—the productivity growth in the U.S. has been much stronger. That is very important for European policymakers to try to address,” Riksbank governor Thedéen told the Financial Times.
Productivity in an economy is typically measured as output, or GDP, per worker. It is seen as vital to improving quality of life by encouraging wage growth. Thedéen is correct that by this metric, Europe has a lot of catching up to…
