THE TRANSATLANTIC PRODUCTIVITY GAP:A SURVEY OF THE MAIN CAUSES

During the last 2 decades, Europe's economy experienced a productivity slowdown whereas the United States (US) economy exhibited a marked acceleration. The result is that since the early 1990s the relative productivity levels between the two regions have continuously diverged, leading to a transatlantic productivity gap. Much of the explanation for this is the strong performance of the US in the so-called new economy or knowledge economy and in particular the underinvestment in R&D, and as a result, productivity and innovation has been at the forefront in the European Policy agenda. However, various explanations for the USEuropean Union transatlantic productivity gap suggest that the picture is rather more complex than simply the effects on, or the result of, particular technology-driven sectors.