GLOBAL FINANCE

Explanations for this vary, including the low rate of US saving,

less investment in R&D, investment diversion to energy saving, and
increased regulation. Much discussion revolved around the apparent
success of Japan compared with the US. By the 1990s, however,
Japan's growth had dramatically slowed and attention shifted else-
where. Various long-term growth policies were attempted in the US
from the 1960s onwards that attempted to increase savings, stimulate
investment generally, encourage R&D, reduce regulations, and improve
education.

MEASURING PRODUCTIVITY

As we saw in Chapter 4, official productivity figures are not thought
to be accurate. This is because it is very difficult to measure the
effects of many products. For instance, it is easy enough to measure
the number of new PCs made, but it is much harder to accurately
measure the increased benefits each new model, with its increased
memory and other features, gives to their users a lawyer might
save weeks of preparation by using a PC to research cases on
the Internet, and book production times have been drastically cut
through IT, yet this kind of saving of time is not measured by the
official data. Many economists argue that this problem has been
true since the late nineteenth century, and applies equally, if not
more so, to indirect productivity advances brought about by trains,
cars, airplanes, telephones, and so on.

There is little agreement over why the overall trend seems to be one of
declining productivity growth in most developed nations but it is clear
that there are political difficulties in adopting a sustained long-term
growth policy in a democracy. Such policies are likely to take many
years before they produce impressive results and may be expensive in
the mean time, making them vulnerable to criticism. Without general
support, politicians are likely to drop such policies in favor of measures
that engender short-term popularity.

There is not even a consensus that growth itself is a good thing.

Supporters of growth say that growth produces all kinds of desirable
benefits including better health, longer life expectancy, more choice