Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the extent of this misallocation in China and India compared to the U.S. in recent years. Compared to the U.S., we measure sizable gaps in marginal products...

In Europe, high and persistent unemployment is usually attributed entirely to "labor market rigidity". The only remedy seriously discussed is deregulation of the labor market. This essay argues that there are two further sources of high unemployment in Europe: over-regulation and weakness of...