Re: Euro Rates Slashed

[Doug Henwood <dhenwood@xxxxxxxxx>]

Dennis R Redmond wrote:

>For short-term income comparisons, that might make sense. But I'm talking
>about the long-term total productive wealth of an economy, which is a very
>different thing.

Dennis makes an interesting point - PPPs are consumption-based, but Anwar
Shaikh argues convincingly that exchange rates are determined by relative
productivity performance. The U.S. resident at the mean may enjoy a higher
consumption standard because of imperial privilege and a vast low-wage
labor force (domestic and foreign), but U.S. productivity growth was still
lagging Western Europe as recently as 1997, if I'm remembering the BLS
numbers right.

Doug