Democracy & Technology Blog You mean high unemployment and slow growth aren’t good things?
Why is 2004 economics Nobel laureate Ed Prescott so optimistic [registration required at Wall Street Journal] about Western Europe’s economic propects over the next decade? Because things are so bad, he writes, even most French and German politicians now realize they must change their ways.
Prescott has done key research on the effects of taxes on labor markets and has shown virtually the entire difference between hard working Americans and liesurely Europeans can be explained by Western Europe’s high tax rates. Although Prescott’s Journal op-ed today does not mention Princeton professor and New York Times columnist Paul Krugman by name, the article seems a direct refutation of Krugman’s attempt last week to paint France’s high unemployment rate, low productivity, and low growth as a counterintuitive boon for French citizens and a demonstration of their superior family values.