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Australia’s productivity gap widens compares to the U.S.

Published

2 years ago

February 9, 2024

Australia’s ongoing efforts to enhance productivity growth have yielded significant reforms, yet its GDP per capita lags behind that of the United States.

A recent analysis delves into the fundamental disparities between the two nations’ productivity levels, shedding light on potential explanations for this gap.

The examination, conducted by the Australian Government Treasury, underscores the critical role of productivity in shaping GDP per capita differentials.

Despite comparable hours worked per capita between Australia and the US over the past four decades, Australia’s GDP per hour worked has consistently remained at 75-85% of its US counterpart.

Income gap

This disparity underscores the significance of productivity in explaining the Australia-US income gap.

For instance, if Australian labor productivity matched US levels in 2002, Australia’s GDP per capita could have been $7,900 higher.

Consequently, closing the productivity gap holds promise for future GDP per capita gains and could propel Australia closer to the global productivity frontier represented by the US.

The analysis examines three primary explanations for the productivity gap: variances in human capital, differences in product and labor market policies, and disparities in geographic and historical contexts.

While human capital disparities, particularly in educational attainment, contribute to the gap, differences in physical capital per hour worked appear less significant.

FILE PHOTO: Tourists walk around the forecourt of Australia’s Parliament House in Canberra, Australia. REUTERS/David Gray/File Photo

Geography and history

While policy reforms could narrow the productivity gap by up to one-sixth, factors such as geography and history may impede Australia’s ability to fully close the gap.

These findings emphasize the multifaceted nature of the Australia-US productivity gap and the importance of targeted policy measures to bridge it.

However, the analysis acknowledges substantial challenges in measuring productivity, citing statistical and methodological issues inherent in international comparisons.

Issues such as varying industry measurement methodologies and exchange rate fluctuations complicate accurate assessments of productivity differentials.

The exploration of Australia-US productivity disparities underscores the complexities of economic analysis and the importance of nuanced approaches to policy formulation.

Money

U.S. and China approve TikTok sale to American investors

US and China approve TikTok’s sale to Oracle and Silver Lake amid regulatory scrutiny, with ByteDance retaining 20%.

Published

1 day ago

January 23, 2026

Harvey Vargas

US and China approve TikTok’s sale to Oracle and Silver Lake amid regulatory scrutiny, with ByteDance retaining 20%.

The United States and China have officially approved a deal for TikTok’s US operations to be sold to American investors, led by Oracle and Silver Lake.

This marks a major shift in the social media landscape as the platform navigates increasing regulatory scrutiny.

Under the new agreement, ByteDance will retain just under 20% of TikTok US, while Oracle and Silver Lake will each take 15% stakes. Other investors will also participate, forming a structure designed to satisfy both commercial and regulatory demands.

The new US-based entity will have a majority American board tasked with overseeing data protection and content moderation. Despite these safeguards, concerns remain about ByteDance’s influence and whether the deal fully complies with recent legislation.

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#TikTokSale #USChinaDeal #Oracle #SilverLake #ByteDance #TechNews #SocialMedia #DataProtection

Money

Markets tumble as Trump tariffs, Greenland rhetoric and Europe backlash collide

U.S. stocks plummet over 800 points amid renewed tariff threats and political tensions from Trump, sparking global trade concerns.

Published

3 days ago

January 21, 2026

Harvey Vargas

U.S. stocks plummet over 800 points amid renewed tariff threats and political tensions from Trump, sparking global trade concerns.

U.S. equities took a sharp hit as markets reacted to renewed tariff threats and heightened political rhetoric from President Donald Trump. The Dow plunged more than 800 points, with the S&P 500 and Nasdaq also sliding as investor nerves rattled risk assets.

The sell-off highlights growing concern around global trade tensions and geopolitical uncertainty, with markets struggling to price in what comes next for U.S. economic leadership and policy direction.

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#USMarkets #WallStreet #TrumpTariffs #GlobalMarkets #USDebt #Europe #Davos #Ticker

Money

Gold hits record highs as investors flee risk

Gold surges amid global uncertainty, with February futures rising 1.71% to $4,674.20 per ounce, signaling safe-haven demand.

Published

4 days ago

January 20, 2026

Harvey Vargas

Gold surges amid global uncertainty, with February futures rising 1.71% to $4,674.20 per ounce, signaling safe-haven demand.

Gold is shining brighter than ever as investors flock to safe-haven assets amid global uncertainty. U.S. gold futures for February delivery jumped 1.71% to $4,674.20 per ounce, while spot gold rose 1.6% to $4,668.14.

The surge comes as geopolitical tensions continue to worry traders, prompting a rush into metals perceived as stable and secure. Analysts say gold is proving its status as the ultimate hedge during turbulent times.

Investors are closely watching markets as gold sets new benchmarks, signalling growing caution across the financial landscape.

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