According to the Conference Board Total Economy Database, Brazil’s labor productivity per person employed tripled between 1950 and 2013. Comparatively, Argentina’s labor productivity doubled in the last sixty years –jumping from $13,069 in 1950 to $25,134 in 2013. Both countries experienced real GDP growth greater than the employment rate.
Additionally, the labor productivity per hour worked tells a similar story. Brazil’s output in 1950 was 2, while in 2013 this measurement increased to 7. Further, this growth is consistent throughout the 63 years – at no point did productivity decrease. Argentina’s output per hour increased overall, however, peaked in 1996.
Both graphs illustrate Brazil’s decreased growth rate after 1980. This may indicate one of the economic slowdowns that Gordon explains in “Is US Economic Growth Over?” Gordon points out that the benefits brought about by electricity began to taper during the 1970’s, adversely affecting the US economy’s growth rate. Is it possible that Brazil suffered from the same problem at this time – or is it something else?
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We can’t apply Gordon to developing countries, because they are far behind the US and other OECD members in output per person. Gordon is about pushing out the frontier; development is about moving towards the frontier. (Of course I have 30 years of hindsight behind that observation…)
One thing that jumps out is the volatility of the Argentine economy, with a boom-bust cycle. Your data does not include the last two years; but currently it’s in another period of bust. That begs the question of why the last couple bust cycles. Hint: look at exchange rate-cum-monetary policy.
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