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Analysis of April Employment Report
America’s Lost Decade, part 4
This is a post following my previous posts on the same topic, see p1, p2, p3.
When discussing the issue, most people focus on GDP growth. Yes, in terms of GDP growth, in the past decade, the US still managed to grow 18%, cumulatively – that’s roughly 1.8 percent per year on average. However, in terms of employment growth, it has been a lost decade for the US (see the chart below).
(click to enlarge)
Given the economic dynamism in the US, and compare it to Japan, I have long thought the Lost Decade would never happen in America, a land full of opportunities.
I guess I need to re-visit my presumptions — Whether a big housing bubble (in the US’ case, two big bubbles in one decade) always foretells anemic economic growth afterward, as opposed to the common belief that Japan’s lost decade was largely due to policy mistakes. Maybe, in the aftermath of a big bubble, America and Japan are really not that much different – an open question.