PRODUCTIVITY IN GERMANY, JAPAN & U.S.   Term Paper ID:23581 Click to get this paper

Essay Subject: Definition, measurement & significance in nations' relative economic strength. Tables.... More...

6 Pages / 1350 Words 7 sources, 9 Citations, APA Format $24.00 Return to List of Papers

Paper Abstract: Definition, measurement & significance in nations' relative economic strength. Tables. Paper Introduction: PRODUCTIVITY CONCEPTS AND EXPLAINING THE RELATIVE STRENGTHS OF THE ECONOMIES OF GERMANY, JAPAN, AND THE UNITED STATES Introduction This research examines productivity as a key element of competitiveness. An examination of productivity concepts and the measurement of productivity is followed by an assessment of the adequacy of productivity measures as explanations for the relative strengths of the economies of Germany, Japan, and the United States. Productivity Concepts Productivity is defined generally as a measure of the rate at which output flows from the use of given amounts of the factors of production (Pappas & Brigham, 1990, p. 191). When the factors of production are used in an efficient manner, a Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. (1995, November-December). PRODUCTIVITY CONCEPTS AND EXPLAINING THE RELATIVE STRENGTHS OF THE ECONOMIES OF GERMANY, JAPAN, AND THE UNITED STATES Introduction This research examines productivity as a key element ofcompetitiveness. The news media in the United States continually reportson the sluggish or recessionary economies in both Germany and Japancontrasted with economic growth in the United States. Economist, 34 (7984), 1 4. J. Relative changes in productivity oftenprovide a better means of assessing what is occurring within anorganization than do absolute measures of productivity. 5 + 99.1United States - 17.5 - 172. The use of a value-based measureincorporates monetary factors, and product sale prices into theproductivity equation. (1996, 21 September). When productivity is defined as the output per employee per hour ofwork, a productivity ratio can be established (Gordon, 1994, p. L. manufacturinghas shown a strong recovery from the slowdown in output and productivitygrowth that occurred during the 197 's. Monthly Labor Review, 118(7), 56-72. In this approach, it isnot necessary to adjust for the effects of inflation. Chicago: The Dryden Press. "Over the past decade, there have been significant changes inthe competitive performance of the world's main industrial nations.Following a massive restructuring in many industries, U.S. Economic indicators. The data presented in thetable do not represent absolute productivity levels. [Source: Financial indicators, 1996, p. (3rd ed.). D., & Wascher, W. Financial indicators. Some analysts may contend that superior productivity is responsiblefor an unemployment rate in the United States that is 5 percent lower thanthat in Germany (Economic indicators, 1996, p. 1 . In one sense, this approach is superior to the use ofvalue as stated in constant prices. Monthly Labor Review, 118(7), 39-55.(24) Oliner, S. Thisdifference, however, did not necessarily mean that productivity in theautomobile manufacturing industry had declined between 1959 and 1979. The concept of productivity isrooted in the production function. [Source: van Ark, 1995, p. (1994). Another approach to the measurement of productivity is to statingoutput in unit quantities (Gordon, 1994, p. A productivity comparison based on cost inthis instance would also have been misleading. Manufacturing prices, productivity, andlabor costs in five economies. Lysko, W. When the factors of production are usedin an efficient manner, a greater output is derived from a given level ofinputs; therefore, productivity increases. Another important aspect of productivity analysis is the way in whichdata are compared. Such a situation is not the case(Lysko, 1995, pp. Productivity ratios, however output is measured,provide an output measure based on units of input. Manufacturing multifactor productivity inthree countries. 191). Challenge, 18-3 .(13) Pappas, J. New York:HarperCollins Publishers. For manufacturing as a whole, theUnited States has clearly maintained its position as a leader in terms ofthe level of productivity during the 198 's and early-199 's" (van Ark,1995, p. Productivity may mean many different things, depending upon thecontext in which the term is used. Rather, theproblem with American productivity has been that, until recently, it wasnot improving as rapidly as is that of most of the other industrialcountries. Often, productivity is measured bystating output in monetary terms. Macroeconomics. A productivity indexprovides a convenient, and an accurate means of comparing and evaluatingproductivity changes over time. Similarly, the 1979 automobile cost more than the1959 automobile even when the prices were adjusted for inflation. In fact, it isstill the highest in the world-especially so in manufacturing. An examination of productivity concepts and themeasurement of productivity is followed by an assessment of the adequacy ofproductivity measures as explanations for the relative strengths of theeconomies of Germany, Japan, and the United States. By contrast, when the factorsof production are used in an inefficient manner, a lesser output is derivedfrom the given level of inputs, and, in this latter instance, productivitywill fall. Inpart, the difference was due to the fact that the more complex and lowerpolluting automobiles of 1979 were more time consuming to make than werethe earlier vehicles. (199 ). 5). Productivity analysis,however, most often employs productivity indices. 1 5]________________________________________________________________ Clearly, based on the data presented in Table 2, the competitive edgeprovided by superior productivity in the United States is not beingtranslated into a superiority for American industry in the global marketplace. (1996, 21 September). (1995, July). With the continuing advances inmanufacturing technology, the multi-factor productivity concept is probablythe most valid measure. Insuch instances, the ratio is determined by using output as the numerator,and by using input as the denominator. American productivity is high. 1 4). (1995, July). This approach provides falsemeasurements unless the constant-currency value concept, which accounts forprice level changes, is employed. 164). Explaining the Relative Strengths of the Economies of Germany, Japan, and the United States Many reports on the productivity problem leave one with the impressionthat American productivity is low. 21). (6th ed.). L., & Brigham, E. This approach,however, also has its deficiencies. As the data presented in Table 2indicate, however, the actual international trade record is just thereverse.Table 2International Trade Balance Comparison: Germany, Japan, and the UnitedStates [billions of US$]________________________________________________________________Country June-August 1996 July 1995-August 1996Germany + 3.93 + 62.6Japan + 6. Multi-factor productivity is the ratio of outputper unit of labor and capital inputs combined, which enables theproductivity ratio to reflect changes in a number of factors (such astechnology, shifts in labor force composition, capacity utilizationchanges, research and development, work force skills and effort, andmanagement quality) which affect the production process (Oliner & Wascher,1995, p. Productivity comparisons between Germany, Japan, and the United Statesfor the period 198 -1993 are presented in Table 1. Productivity in thiscomparison represents value-added in constant-currency valued output perlabor-hour of input to the production process. In that industry (beforethe widespread introduction of robotics), more worker hours were requiredto produce an automobile in 1979 than were required in 1959. The productivitydata presented in Table 1 certainly appear to support such comparisons. Productivity Concepts Productivity is defined generally as a measure of the rate at whichoutput flows from the use of given amounts of the factors of production(Pappas & Brigham, 199 , p. Fundamentals of managerialeconomics. This basis of productivity, however,makes measurement in a service activity. 39-55). 1 . Economist, 34 (7984), 1 5. In the caseof both Germany and Japan, however, the productivity levels remained belowcomparable levels in the United States. P. On the other hand, in a technologically advancedeconomy, a productivity measure based only on labor inputs also tends todistort productivity measures. One example of the deficiency may beseen in the automobile manufacturing industry. Is aproductivity revolution under way in the United States? Rather productivitylevels for the United States are indexed at 1 , and the productivitylevels for Germany and Japan represent the value-added constant-currencyvalued output to labor-hour of input in those countries as a proportion ofthe productivity level in the United States.Table 1Productivity [Value-Added Per Labor-Hour] Comparison: Germany, Japan, andthe United States________________________________________________________________Country 198 1985 199 1993__Germany 95.2 9 .5 85.9 82.5Japan 66.2 69.9 77.9 76.2United States 1 . 1 4). Gordon, R. Output may also be measured in terms of the quantity of products andservices produced. 56). Such factors, however, tend to distort theproductivity of workers. A more effective means ofmeasuring productivity in an industry such as automobile manufacturing isto use constant- currency valued output as the numerator, and constant-currency valued total labor as the input. References van Ark, B. Those same analysts,however, then must explain why superior productivity results in anunemployment rate in the United States that is 5 percent higher than thatin Japan (Economic indicators, 1996, p. 58]________________________________________________________________ As the data presented in Table 1 indicate, value-added in constant-currency valued output per labor-hour of input in Germany has beendeclining in relation to that in the United States, while that in Japan hasbeen trending upward in relation to that in the United States. Again,this price increase resulted from the more complex and lower pollutiondesigns of the later vehicles. The productivity comparison reflects a clear superiority for theeconomy of the United States in relation to both Germany and Japan-especially Japan. If the industry in the United States clearly were more competitivethan that in Germany and Japan, however, those two countries should beposting international trade deficits while the United States recordedpositive international trade balances. 1 . If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.