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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Hawkmoon who wrote (3082)5/8/2001 2:35:52 PM
From: Ahda  Read Replies (1) of 3536
 
Productivity is directly linked to the quantity of goods workers produce per labor hour performed.
True
When GDP growth is in decline and fewer products are produced, obviously productivity will decrease because the same number of people are now producing fewer products.

The cost factor increases this is inflationary.

When the Fed finally arrives at a point with interest rates where businesses are once more willing to invest and expand their businesses, based upon greater ability to generate profits on borrowed expansion capital, then productivity would increase commensurately

I believe business are addressing this in the form of expanding elsewhere where costs are less. This produces a certain amount of conflict with growth and the prosperity of our nation.

When you start laying off full-time staff and downsizing operations to a proper equilibrium between production and labor force, productivity will once more properly reflect potential.

In a singular nation this is a circle that self propels. In a global economy the slackening period allows for others to become more mature in their ability. The chance of return to a limited nation cycle i feel becomes less and less due to the global cycle. This leads me to believe that a slowdown is much more costly to growth than it was.
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