Much of the language used to describe monetary policy, such as "steering the economy to a soft landing" of "a touch on the brakes" , makes it sound like a precise science. Nothing could be further from the truth. Economists have been particularly surprised by favorable inflation figures in Britain and the United States, since, conventional measures suggest that both economies, and especially America's, have little productive slack.
Last year Mitsuo Setoyama, who was then education minister, raised eyebrows when he argued that liberal reforms introduced by the American occupation authorities after World WarII had weakened the "Japanese morality of respect for parents".
The Aswan Dam, for example, stopped the Nile flooding but deprived Egypt of the fertile silt that floods left-all in return for a giant reservoir of disease which is now so full of silt that it barely generates electricity.New ways of organizing the workplace--all that re-engineering and downsizing--are only one contribution to the overall productivity of an economy, which is driven by many other factors such as joint investment in equipment and machinery, new technology, and investment in education and training.
