"Never in any two-year period in the modern American economy's experience have hours fallen so fast. Given what has happened to hours in the recent past, the standard historical pattern would lead you to expect output to be falling at 2.5% per year or more--and you would expect productivity growth to be negative, not positive and in excess of 4% per year.
We are indeed in uncharted waters. Not that we should mind--extraordinarily rapid productivity growth is a wonderful gift. But it does pose different problems for economic management to solve than the ones we had gotten used to... "
Krugman covered a similar set of topics, focusing on unemployment. Where is this productivity? I don't see it in the workplace. Is it a side-effect of China's lowering the cost of many manufacturing inputs?
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