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February 13, 2008


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The post world war II growth rate of japan, germany, italy, and france is likely inflated due to these countries recovering from a low base after the end of WWII. The post-oil-price-spike slowdown lowered the growth rate in these countries to the high growth rates seen in the english speaking countries earlier.

One also needs to look to globalisation. The oil price spike should have moved a large amount of capital into the middle east, latin america, and scandanavia. This should have improved growth rates in those economies at the expense of the more developed countries. Meanwhile, well developed countries have less room to improve than less developed countries. Investment should naturally flow to less developed countries all else being equal. Globalisation, financial liberalisation, and improved international governments may have shifted high rates of productivity growth from the old-guard to the asian tigers and elsewhere.

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