• The United States economy continues to rank as the world's largest and Americans continue to enjoy one of the world's higher standards of living-but other parts of the world are quickly catching up. Japan's economy was less than 10 percent of the U.S. economy in 1960 and trailed most of the major European economies. By 1991, it had grown to be the world's second largest economy with a gross domestic product (GDP) twice that of former West Germany and equal to nearly 42 percent of U.S. GDP. Several Asian newly industrialized economies show similar patterns of growth starting in the late 1970s. (For more information see: Figure 6-1.)

• Comparisons of general levels of labor productivity, measured by GDP per employed person, again show other parts of the world quickly closing in on the U.S. lead position. For the past 40 years, labor productivity growth in the United States consistently fell below almost all other countries. In 1960, U.S. GDP per employed person was twice that calculated for most European nations and four times that calculated for Japan. By 1991, the gap closed significantly with labor productivity rates in many European nations and in Japan rising to 70 to 90 percent of the U.S. rate. (For more information see: Figure 6-1.)

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