Publications

Labour productivity is arguably one of the most important economic indicators that we have. It measures how much economic output each worker can produce over a period of time, usually taken to be a year. For a country, improvement in labour productivity means more goods and services can be produced with less workers and this underpins the potential for economic growth. For workers, increased productivity is the most important source of higher income and improvement in the standard of living. Over the long-term, sustained economic development hinges on the continued growth of labour productivity.

The last decade has been an exciting time for economists. It began with the worst global financial and financial crisis since the Great Depression, which led to much soul-searching on what we thought we knew in economics. This was then followed by central banking and the European currency union – two of the most successful technocratic experiments from decades before – being tested to their limits. And last year, the foundations of the existing political establishment in the West finally began to crack, foreshadowing a possible retreat from a liberal global economic order. Underlying these, the question of what the role of the state should be in the economy, versus that of the market, is fundamental.

The Nobel laureate Robert Solow once quipped that every attempt to explain differences in economic performances using culture has ended up in a “blaze of amateur sociology”1. In his latest book – A Culture of Growth – Joel Mokyr, the eminent economic historian from Northwestern University, takes this challenge head on and puts forth the argument that culture is the answer to arguably the most important question in economics:

The idea that rental can be a major policy axis in addressing our housing conundrum seems counter-intuitive when we have such a high home ownership rate, reinforced by policy and programmes that promote and prioritize ownership over rental.‍