A footnote to my posting on US profitability.

In its Economic Outlook, the OECD publishes data on "rates of return on
capital in the business sector," which they don't define in the volume (but
which may be described in the documentation available on their web site).
Most countries exhibit a pattern similar to that of the U.S., with a steady
recovery from long-term lows in profitability in the early 1980s. German
profit rates bottomed at 9.9% in 1982, after averaging 11.8% in the 1970s,
and have since risen to 14.1% in 1996; the UK, from 10.1% in the 1970s to
8.1% in 1981 to 12.5% in 1996; the EU as a whole, from 12.6% in the 1970s
to 10.7% in 1981 to 14.7% in 1996. The U.S., on this measure, went from
14.0% in the 1970s to 12.6% in 1982 to 18.4% last year. An exception to
this pattern is Japan, which had an averaage profit rate of 17.9% in the
1970s, stayed fairly steady in the 14-16% range through the 1980s, and
settled back to 13.9% in 1996.

There's no note warning against cross-national comparisons, so I take that
as a license to be reckless. The country with the highest return in the
OECD in 1996 was Greece, at 22.7%; next came Canada, at 19.2%; Spain was
next, 18.9%; and in fourth place, the US, at 18.4%. Switzerland came in the
lowest, at 3.4%; Finland, second from the bottom, at 8.9%. Also clustering
in the bottom were Denmark, Norway, Sweden, and the UK.

Doug

--

Doug Henwood
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