This chapter presents some comparative indicators of the economic performance over the past four decades of what are now the OECD countries. 2 Initially, performance is defined and measured with reference to three economy-wide indicators. All of these are rates of growth, expressed for each period in annual average percentage terms. The three growth rates relate to (i) output, as measured by gross domestic product (GDP); (ii) employment; and (iii) output in relation to employment, or 'productivity' for short. Besides these three basic indicators, I refer to inflation rates and unemployment rates, which also bear on economic performance. This is the framework used.
Since performance is examined in terms of actual figures, it is worth asking at the start what specific values for these indicators appear from past long-run experience to be typical: what performance is it reasonable to expect from a representative OECD country? An answer to this question is provided in Angus Maddison's excellent book, Phases of Capitalist Development (1982). It is there suggested, on the basis of evidence extending over the period from 1820 to 1980, that the following triad of growth rates has been characteristic of the long-run economic performance of these countries in the capitalist era:
output (GDP) growth 2.4 per cent per annum
population growth 0.9 per cent per annum
growth of GDP per head 1.5 per cent per annum.
Since we are concerned here with employment rather than population, and since round figures are appropriate for the present purpose, I take as a starting-point a slightly different triad: 2 1/2 per cent annual growth for output, 1 per cent for employment, and 1 1/2 per cent for productivity. I shall refer to this pattern of growth rates as the OECD historical norm.
Maddison's analysis covers sixteen countries. All of them are members of the OECD, and between them they account for over 90 per cent of the