“Myths and Realities of U.S. competitiveness” by Paul Krugman, Science 1991

 

To answer this question you are supposed to study “Myths and Realities of U.S. competitiveness” by Paul Krugman, Science 1991

Here is Krugman’s thought experiment: Imagine a world in which labor productivity around the world grows at annual rate of 1%, both in the U.S. and abroad. It would seem reasonable to suppose that standards of living and real wages would rise by 1% per year everywhere. Now, suppose that U.S. productivity were to continue its 1% growth rate, but that productivity growth in other countries were to accelerate, say to 4% annually. Would the United States be in trouble?

Summarize Krugman’s answer to this question. Your answer must be at most 300 words. Type your answer.