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Russia Travel Guide You are here: About > Travel > Eastern Europe for Visitors Travel Go Eastern Europe Essentials Best of Eastern Europe Map of Central/Eastern Europe Photo Gallery Country Profiles Discount Travel Websites Articles & Resources Planning Your Trip Ways to Travel What to Do in East Europe Maps for Eastern Europe Czech-SlovakTravel Hungary Travel Poland Travel Russia-Belarus-Ukraine Romania-Moldova Travel Baltic Travel Balkan Travel Culture and Holidays Photo Galleries East Europe Travel and Language Books Forums Help FREE Newsletter Sign Up Now for the Eastern Europe for Visitors newsletter! See Online Courses Search Eastern Europe for Visitors Stay up to date! Email to a friend Print this page Most Popular First Christmas Tree Europe map Best of Eastern Europe Croatia Naturism and Nudism Discount Travel Websites What's Hot Krakow Photo Gallery Profiles of Eastern Europe Moscow City Profile Czech Republic Photo Gallery - Charles Bridge and castle Sofia's Religous Buildings Related Topics Hotels / Resorts / Inns European History Architecture Air Travel Europe for Visitors Russia Travel Guide From Apply Now , Your Guide to Eastern Europe for Visitors . FREE Newsletter. Sign Up Now! Welcome Welcome to the Travel Guide for Russia! This online tourist planner will help you prepare for visiting the immense country of Russia. While this planner will give you plenty of information, if you have a specific question not found here, visit the Eastern Europe for Visitors Forum and post your question there.
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Topic Index | Email to a Friend Our Story | Be a Guide | Advertising Info | Work at About | Site Map | Icons | Help User Agreement | Ethics Policy | Patent Info. | Privacy Policy | Kids' Privacy Policy ©2005 About, Inc., A part of the New York Times Company . All rights reserved. Around About New Video iPod - Review POLL: Must-Have Gadgets VIDEO: Portable Gaming VIDEO: Choosing a TV Hugh Hefner's Life What's Hot Krakow Photo Gallery Profiles of Eastern Europe Moscow City Profile Czech Republic Photo Gallery - Charles Bridge and castle Sofia's Religous Buildings
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Charleston Golf Guide: Directory of Charleston Golf Courses, Charleston Golf Vacations, Golf Packages in SC Course List Directions Events Coupons Hotels/Resorts Amenities Chart Internet Services Course Directions Charleston Area Downtown Map News & Info Policies & Tips Contact Us How do you become more consistent on your medium to long greenside bunkershots? Set up with a square stance with most of your weight forward and the balloff your front foot. Take the club straight up on your backswing and swingthrough in a fluid motion. The combination of the square stance and the smoothswing will result in a lower trajectory shot that places less spin on the ball.This will allow the ball to run out towards the pin without that peskyinconsistent spin. J.P. Ringer Head Professional Shadowmoss Plantation The Official Charleston, SC Online Golf Guide Come see why the world plays in Charleston. Our Winter Packages start at just$69 per person (including cart and taxes) with even better deals available midweek! Build your own custom golf package and get an instant price quote! Or, call us at1-800-774-4444. Golf Guide The Charleston Area Golf Guide provides complete information about Charleston, SC area golf courses as well as things to see and do off the course. Let us create a custom golf vacation package for you! To learn more about available golf packages, browse through our Courses , Accommodations , or go directly to Golf Packages. Charleston offers exceptional golf in one of the world's most highly acclaimed vacation destinations. Discover world-class golf courses situated on breathtaking coastal terrain, ranging from true links style courses to tight wooded lowcountry layouts. Golfers and non-golfers alike will enjoy our unmatched selection of specialty shops, restaurants, lively nightlife, sun-drenched beaches and historic sites. The Charleston area offers as many good times off the golf course as on it! LODGING MEMBER QUICK LINKS Historic District North Charleston/Summerville Mount Pleasant Days Inn Historic District Holiday Inn Airport & Convention Center Hampton Inn Patriots Point Embassy Suites - Historic District Hilton Garden Inn Charleston Airport Holiday Inn Express & Suites - Isle of Palms Francis Marion Hotel Ramada Inn Coliseum/Convention Center Holiday Inn Patriots Point Hampton Inn Historic District Woodlands Resort & Inn Homewood Suites by Hilton King Charles Inn Historic District Mills House Hotel Near Historic District Resorts Rental Agencies Best Western Sweetgrass Inn Kiawah Island Golf Resort Beachwalker Rentals Charleston Riverview Hotel Seabrook Island Resort Resort Quest - Kiawah Island Hampton Inn & Suites - West Ashley Wild Dunes Resort Holiday Inn Riverview SpringHill Suites by Marriott GOLF COURSE MEMBER QUICK LINKS Mount Pleasant North Charleston West Ashley Charleston National Country Club and Learning Center Coosaw Creek Country Club The Links at Stono Ferry Dunes West Golf Club The Golf Club at Wescott Plantation Shadowmoss Plantation Patriots Point Links RiverTowne Country Club Summerville Seabrook Island Wild Dunes Legend Oaks Plantation Crooked Oaks Harbor Course Pine Forest Ocean Winds Links Course Kiawah Island Cougar Point Oak Point Ocean Course Osprey Point Turtle Point As recent host of the South Carolina Golf Associations State AmateurQualifying Tournament, you can count on ShadowmossPlantation being a great test of your golf game and offering a variety oftraditional holes and what you would expect from lowcountry golf. Stretching toover 6,700 yards, the course features lush Bermuda fairways, old oaks and subtleelevation changes. The clubhouse features a full service bar and some of thebest-grilled hamburgers around. Make sure you add Shadowmoss Plantation to yourpackage today! SwampFox Getaway Weekend Only $128 pp/day/dbl occ (3 nights & 3 Rounds) Stay Here: The Francis Marion Hotel in HistoricDowntown Charleston (Pictured Above) Play Here: (Choose Three) Dunes West Country Club Shadowmoss Plantation Charleston National CC Golf Club at Wescott Plantation Also check out thewebsites of our key partners listed below!!! Home | Courses | Accommodations | Charleston Information | Golf Specials | Request A Guide | Maps & Directions | About Us
Germany Travel > Germany
Germany Travel Guides - Recommended Guidebooks for Germany You are here: About > Travel > Europe for Visitors > Germany Austria Switzerland > Germany Travel > Germany Travel Guides - Recommended Guidebooks for Germany Travel Go Europe Essentials European Vacation Planning Map Europe Travel 101 - Before you Go European Distances The Best of Europe European Photo Gallery Articles & Resources Europe Travel Planning What to do In Europe Lodging - Hotels and More European Travel Maps Sex and Nudism Travel Photography Transportation Benelux Countries France Germany Austria Switzerland Greece Italy and Malta Travel Info Scandinavian Travel Spain and Portugal United Kingdom and Ireland Buyer's Guide Before You Buy Top Picks Italy Travel Guidebooks Europe Travel Guidebooks German Travel Guidebooks Product Reviews Forums Help FREE Newsletter Sign Up Now for the Europe for Visitors newsletter! See Online Courses Search Europe for Visitors Stay up to date! Email to a friend Print this page Suggested Reading Germany Travel Resources Germany Map and Travel Essentials Related Guide Picks European Guidebooks European Walking Guidebooks Most Popular Europe Map - Distances Between Cities in Western Europe Europe's Best Nudist Beaches Europe Picture Galleries Italy Pictures Europe Travel 101 - Before You Travel to Europe for the Firs... What's Hot Power Adapters Noord-Holland - Delights of North Holland Travel Visiting Pompeii Italy Guidebooks Naples - Getting There Related Topics France for Visitors Greece for Visitors United Kingdom / Ireland for Visitors Eastern Europe for Visitors Italy for Visitors Top 10 Germany Travel Guides and Guidebooks Guide Picks From James Martin , Your Guide to Europe for Visitors . FREE Newsletter. Sign Up Now! Germany is the second most popular country to travel to in Western Europe, according to the stats on this site. Once you have the basics, you might want a written guidebook to take along with you. Here are some of the best, including some specialty guidebooks for Christians, wine lovers, and, well, dummies. Note that some 2005 German Guidebooks are listed here; you'll have to pre-order them but many will be available before Christmas. 1) Rick Steves' 2005 Germany and Austria Rick Steves is the king of innexpensive, independent travel. He'll get you to the "back doors" of Europe, providing you get there before the millions of others just waiting to kick them down. So why not go for the 2005 edition before people catch on? Rick's guides aren't as comprehensive as most guides in this category, they pretty much only take you to the places Rick finds captivating. 2) Lonely Planet Germany Lonely Planet has been doing guidebooks for robust, independent travelers for a while, using a stable of fine writers rather than a single writer for each guidebook. Lots of maps, including 35 city maps and maps of each German state. 3) Frommer's Germany 2005 A bit more up-market than Lonely Planet or Rick Steves, this guide will give you the goods on the better places to stay and eat. You'll have to pre-order to get the 2005 version. 4) Let's go Germany 2005 You budget savvy travelers will get a lot out of the Let's Go guides, aimed for the younger traveler who doesn't need luxury or haute cuisine. 5) Insight Guide Germany Insight Guides are known for their photography. But do you want to carry photographs around to the places you're going to see? On the other hand, the extra weight of the slick Insight guides may not bother you if you're still undecided on a destination and want to check things out visually. 6) The Christian Traveler's Guide to Germany Ok, forget the bars and adult areas of Germany, this book is for those who wish to explore the roots of their religion. Visit the top ten Christian heritage sites in Germany, and get an overview of the religious aspects of the country's development through history. 7) Michelin Green Guide to Germany This was last updated in 2000, but if you want to know where to go for the best grub in Germany, this may be the guidebook for you. Green guides are compact and tell you just the basics. 8) Germany for Dummies Don't have a clue? Well, read our own stuff on Germany, then get a dummies book. You'll get tear-out maps and lots of best-of lists from novelist, playwright, and travel writer, Donald Olson. 9) Do as the Germans Do You'll want to know how to behave when you're in Germany, and get a few tips on the lingo. Hyde Flippo, of About's German language site, lets you in on the secrets of getting a table in a decent German restaurant or making small talk to the person across the table from you. 10) A Traveller's Wine Guide to Germany There's more to drink than beer in Germany. In fact, there are thirteen wine regions and lots of wine flowing in those restaurants and bars. If you're really into vino, you'll need a good guide to enjoying the pleasures of the grape while you're in Germany Important product disclaimer information about this About site. Topic Index | Email to a Friend Our Story | Be a Guide | Advertising Info | Work at About | Site Map | Icons | Help User Agreement | Ethics Policy | Patent Info. | Privacy Policy | Kids' Privacy Policy ©2005 About, Inc., A part of the New York Times Company . All rights reserved. Around About New Video iPod - Review POLL: Must-Have Gadgets VIDEO: Portable Gaming VIDEO: Choosing a TV Hugh Hefner's Life What's Hot Power Adapters Noord-Holland - Delights of North Holland Travel Visiting Pompeii Italy Guidebooks Naples - Getting There
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Germany - Travel Information and Planning Travel in Germany You are here: About > Travel > Europe for Visitors > Germany Austria Switzerland > Germany Travel Travel Go Europe Essentials European Vacation Planning Map Europe Travel 101 - Before you Go European Distances The Best of Europe European Photo Gallery Articles & Resources Europe Travel Planning What to do In Europe Lodging - Hotels and More European Travel Maps Sex and Nudism Travel Photography Transportation Benelux Countries France Germany Austria Switzerland Greece Italy and Malta Travel Info Scandinavian Travel Spain and Portugal United Kingdom and Ireland Buyer's Guide Before You Buy Top Picks Italy Travel Guidebooks Europe Travel Guidebooks German Travel Guidebooks Product Reviews Forums Help FREE Newsletter Sign Up Now for the Europe for Visitors newsletter! See Online Courses Search Europe for Visitors > Germany Austria Switzerland > Germany Travel Germany Travel Information - Planning your Trip to Germany Germany covers a huge part of Europe, and there is a great variety of landscapes to cover, from the Black Forest to Bavaria to the romantic Rhine river, to the urban sprawl of Berlin--get information on traveling in Germany here. Subtopics Auto Museums (5) Germany Transportation (11) Baden Baden (9) Germany Web Resources (22) Bamberg (7) Hamburg (11) Berlin Germany (39) Heidelberg (24) Bonn (10) Karlsruhe (8) Cologne Germany - Koln (17) Leipzig (12) Cycling Germany (3) Maps of Germany @ Dinkelsbuhl, Germany (10) Munich (8) Dresden, Germany (13) Oktoberfest (7) Dusseldorf (7) Pictures of Germany (10) Frankfurt (14) Romantic Road (13) Freiburg (4) Rothenburg (7) German Rail Passes (3) Trier, Germany (7) German Wine Regions (13) Weimar (9) Germany - Lodging (7) Articles & Resources Sort By : Guide Picks | Alphabetical | Recent Germany Travel Map and Travel Resources See a map of Germany showing the main tourist cities, as well as basic information on transportation, tipping, language and customs in Germany. Links to Germany Rail Map with Rail Pass information and a Germany region map. Germany Maps - Michelin Road Maps of Germany Michelin road maps of Germany to buy for your travel while driving in Germany. Germany Travel Guides - Recommended Guidebooks for Germany The top ten recommended travel guidebooks for Germany, featuring German cities and Germany travel advice. Germany's Castle Road - Map and Travel information Like scenic drives? Here's one with plenty of fairytale castles in the south of Germany. We have a map, tourism information, and alternative attractions in the region. Cologne Travel Essentials - Cologne City Profile Our page of essentials for visiting the German city of Cologne, including transportation options, attractions, weather, internet access, and more. Leipzig Germany Travel Planner A concise guide to visiting Leipzig, including hostel and hotel information, a recommended restaurant, attractions, travel and transportation information, and pictures. Munich Germany Travel Planner Information on visiting Munich, including restaurant and hotel recommendations, pictures, walking tour information, and information on visiting the Dachau Memorial. Neuschwanstein Castle Mad Ludwig's Dream - Neuschwanstein Castle: Perched over one of the world's prettiest gorges, Neuschwanstein Castle is everyone's fantasy dream. It's the image you've seen everywhere that makes you want to start planning your trip to Germany. Why not rent that Porsche and hit the romantic road? We'll give you what you need to know. Nuremberg Germany Travel Planner Picturesque Nuremberg, a compact city with cobble-stoned squares and half-timbered houses, is a photographer's dream and a great place to visit. We give you essential info on traveling there - hotels, restaurants and attractions, plus a map and photo gallery. Nurburgring - Driving Germany's Nurburgring Race Track on Your Vacation The Nurburgring is the most challenging race track in the world. Called "The Green Hell" by Jackie Stewart, the Nurburgring is today a toll road, test center, and formula one race track. Strasbourg Cathedral - View from the Viewing Platform of the Cathedral Pictures from the viewing platform of Strasbourg cathedral in Strasbourg, France. Schwabish Hall - Travel and Tourism guide for Schwabisch Hall Germany Schwabisch Hall is a less touristed stop along Germany's Castle Road than Rothenburg. Known for its salt production, Schwabisch Hall is a rail junction and a popular tourist center with saline baths. Bavaria - Travel Guidebooks to Germany's Bavaria Region Bavaria is in the southwest of Germany, home to Munich and Pope Benedict XVI. Bavaria is one of the top regions in Germany to visit The Pope's Bavaria - Map and Information for Following in the Pope's Footsteps Pope Benedict XVI grew up and taught in southern Bavaria. Here we offer a map of important places for an independent pilgrimage to the places that were touchstones in the new Pope's spiritual life. The Pope's Bavaria - Traunstein and Marktl am Inn, Germany Here is a map for the Bavarian cities that influenced Joseph Cardinal Ratzinger, the new Pope Benedict XVI, including his birthplace Marktl am Inn, and the village of his seminary, Traunstein. Travel and tourism information for pilgrims interested in the new Pope. Topic Index | Email to a Friend Our Story | Be a Guide | Advertising Info | Work at About | Site Map | Icons | Help User Agreement | Ethics Policy | Patent Info. | Privacy Policy | Kids' Privacy Policy ©2005 About, Inc., A part of the New York Times Company . All rights reserved. Around About New Video iPod - Review POLL: Must-Have Gadgets VIDEO: Portable Gaming VIDEO: Choosing a TV Hugh Hefner's Life What's Hot Power Adapters Noord-Holland - Delights of North Holland Travel Visiting Pompeii Italy Guidebooks Naples - Getting There Headlines Antwerp Pictures Antwerp is a fashion and diamond center for Belgium and... Like to Travel Well? Follow the CIA! I really should have paid attention when the CIA came... Tapas from Cans? Ok, so you wander into one of Barcelona's most celebrated... North Holland: Noah's Ark Redux A pious north Holland businessman took out a 300 000...
European Vacation There's a
Federal Reserve Bank of Minneapolis - The Region - European Vacation (December 2003) I'm at: Home > Publications > The Region > December 2003 > Article Publications Expand All Collapse All The Region Index by Issue Interviews President's Columns fedgazette Index by Issue Topics Index Annual Report Quarterly Review Community Dividend Banking and Policy Studies Articles Toolbox ( advanced search ) December 2003 European Vacation There's a simple reason Americans work longer hours than Europeans, says economist Ed Prescott. And it isn't what you think Douglas Clement Editor It's no secret that Europeans work less than Americans do. Every Labor Day the media tell us that Europeans have just enjoyed weeks of summer vacation while Americans have been toiling away. These stories often depict Americans as hard-working drones who revere material possessions above all else. Europeans meanwhile bask in the good life of long lunches and months at the beach. There is some truth to the portrayal, at least in terms of hours worked. The International Labor Organization reports that the average American worked 1,815 hours in 2002, well above the comparable figures for France (1,545) and Germany (1,444), for example. (The average South Korean, on the other hand, worked over 2,400 hours.) But if it's widely acknowledged that Americans work more hours than Europeans, it remains a puzzle quite why there's such a large difference. With similar economies and social structures—at least relative to the rest of the world—it would seem that labor patterns should also be alike. Social scientists have been hard-pressed to explain the disparity. Most accounts focus on cultural explanations. The most popular is the notion that Europeans have a fuller appreciation of la dolce vita —the sweet life—the Italian version of the idea that life is to be enjoyed, not endured. Work is a means to an end, not an end in itself. The idea of cultural and religious influences on economic activity isn't new. German sociologist Max Weber wrote The Protestant Ethic and the Spirit of Capitalism nearly a century ago, attributing the rise of capitalist economies to the “Protestant work ethic.” It was an immensely persuasive theory in its time, and derivative explanations have held great sway ever since. “Why do Europeans and Americans differ so much in their attitude toward work and leisure? I can think of two reasons,” opines a recent Time magazine essay. “Broadly speaking, Americans value stuff—SUVs, 7,000-sq.-ft. houses—more than they value time, while for Europeans it's the opposite. Second, ... in the puritanical version of Christianity that has always appealed to Americans, religion comes packaged with the stern message that hard work is good for the soul. Modern Europe has avoided so melancholy a lesson.” “It all comes down to what people feel is important and how they feel about their lives,” argues a September 2003 U.S. News & World Report editorial. “We value more money and more stuff; they value more leisure time. ... We are proud of being busy—it is a virtue; being idle is perceived as a vice.” Economic explanations Economists have always been suspect of such cultural explanations. Standard economic theory assumes that people's preferences are, on average, homogeneous, and that choices depend largely on economic factors. Still, while economists agree that dollars and cents lie behind the work pattern differential, there is little harmony among them as to the right economic explanation. Some economists say work regulations keep Europeans from working longer hours and point favorably to recent European reforms on vacation time. Others argue that greater inequality in the United States motivates workers to try harder to get ahead. Most of these explanations come from the perspective of labor economics and its core belief that social structures and institutions such as unions are the major determinants of labor patterns. But in a recent series of papers and lectures, Edward C. Prescott, senior monetary adviser to the Minneapolis Fed and economist at Arizona State University, looks at the labor supply question through the prism of the growth model—a different perspective altogether—and provides a convincing and remarkably straightforward explanation for the dramatic differences in hours worked. It is an explanation that has far-reaching implications for policymakers—and for anyone else who's ever received a paycheck. According to Prescott, the reason for these large differences in labor supply is not culture. “French, Japanese, and U.S. workers all have similar preferences,” he writes. “The French are not better at enjoying leisure. The Japanese are not compulsive savers.” The reason for the wide range in working hours is, in a word, taxes. Europeans supply less labor because there's a much larger wedge in most European countries between what a worker is paid and what that worker actually gets to keep after taxes are taken out. This tax wedge, argues Prescott, distorts the trade-off people make between consumption and leisure by making consumption more expensive. And since people work, ultimately, to earn money to pay for consumption goods, they'll supply less labor if consumption goods become relatively more expensive. The cheaper alternative: leisure. Hello, Riviera. If the concept seems straightforward, its evolution was anything but. Like most ideas that seem obvious in retrospect, the awareness that taxes distort labor markets dramatically and account for major international differences in work patterns came about indirectly and as a revelation to those who happened upon it. The discovery Prescott's discovery about the role of taxes in labor supply variation began, simply enough, in his classroom at the University of Minnesota, where he taught from 1980 to 2003. “I was making up exercises for my students,” he recalled in a recent interview. “I said, 'use this nice little growth model.'” The “nice little model” he presented to his students is the workhorse of modern macroeconomics; it says, mathematically, that a nation's total output (or gross domestic product, GDP) is dependent on three sources: labor, capital and the efficiency (or productivity) with which it merges them to create economic value. The other key part of this standard theory is, in the jargon of economics, a utility function: a formula representing the notion that households try to maximize their happiness by finding the best possible combination of leisure and consumption, given their resources. Prescott wanted his students to become familiar with this model by looking at how it performed in different nations over time, and how key variables—capital endowments, productivity, labor supply—could account for differences among nations in per capita GDP. “I wanted to try to get across the basic ideas and the importance of productivity,” said Prescott. “And then I thought, let's put a few taxes in.” The intuition was far more significant than Prescott suspected, but that became clear only after looking at the relative contributions of capital, productivity and labor. The data, compiled by the United Nations and the Organization for Economic Cooperation and Development, showed that in the mid-1990s among developed countries—the United States, much of Europe and Japan—relative levels of capital differ little and explain just a small portion of the variation in per capita GDP (see adjacent table). “The capital factor is not an important factor in accounting for differences in incomes across the OECD countries,” writes Prescott in his 2002 Richard T. Ely Lecture to the American Economic Association. “[It] contributes at most 8 percent to the differences in income between any of these countries.” Capital, Labor, Productivity and GDP 1993-96 Country Capital/ Output Ratio (1990) Hours worked per Week per Person 15-64 Productivity: GDP per hour Worked; US=100 GDP per Person 15-64; US=100 Germany 2.7 19.3 99 74 France 2.2 17.5 110 74 Italy 2.6 16.5 90 57 Canada na 22.9 89 79 United Kingdom 2.6 22.8 76 67 Japan 2.5 27.0 74 78 United States 2.3 25.9 100 100 Source: Federal Reserve Bank of Minneapolis Research Department Staff Report 321 and Working Paper 618 . Productivity, on the other hand, is very important, at least for some national differences. Japan and the United States, for example, have similar levels of labor and capital, but per capita GDP in Japan is far below that in the United States because its productivity is less than three-quarters that of the United States. But what of European countries like France, Italy and Germany? Why are their levels of per capita GDP so much lower? All these nations have capital endowments comparable to the United States. Their productivity levels also are similar to U.S. rates, or in the case of France, even higher. The data suggest that the differences in wealth are due almost exclusively to the markedly lower number of hours worked in these European countries. Germany, for instance, had a slightly higher capital endowment than the United States and an equal level of productivity, but just 74 percent of the U.S. per capita GDP. The evident reason: Its workers supplied just over 19 hours of labor per week compared to nearly 26 hours a week per American worker. While many believe that cultural differences lead to fewer hours worked in Europe than in the United States, Prescott doubts it. After all, data from the early 1970s show that the French actually worked more hours per week than did Americans at that time. Has French culture changed radically over the last two decades? Probably not: They still like good wine, aged cheese and, inexplicably, Jerry Lewis. Prescott's hunch was that differences in marginal tax rates might explain the differences in labor supplied and thus account for differences in per capita GDP. Enter the tax wedge “What is important is the price of consumption relative to leisure,” Prescott writes in the lecture he gave in April 2003 as he accepted Northwestern University's prestigious Erwin Plein Nemmers Prize in Economics. “And it is determined by the consumption tax rate and the labor income tax rate.” (See the lecture, “ Why Do Americans Work So Much More Than Europeans? ”) By introducing these taxes into the growth model, and making standard microeconomic assumptions, Prescott derived what he calls “the key equilibrium relation.” 1 It's a mathematical formula for labor supply that says workers will supply labor dependent on, among other things, their preference for consumption now over consumption later (spend or save?), their preference for leisure relative to consumption (play or work?) and the effective tax rate. Holding the first two variables fixed and looking empirically at different national tax rates enables Prescott to see if tax differences can account, fully or partially, for variations in labor hours supplied. Estimating the effective tax rates in these countries was, in itself, a major accounting exercise. Consumption taxes include value-added taxes, sales taxes, excise taxes and property taxes. Labor is subject to both income taxes and Social Security taxes. For each nation under consideration, Prescott and his students crunched the numbers, determined a tax rate, plugged it into the formula along with fixed estimates of the other variables, and derived predictions of labor hours supplied per week per worker. How good were the predictions? Dead-on for Germany and the United Kingdom, a bit low for Canada and the United States, and a bit high for the other countries (see table below). Given measurement inaccuracies, the rough nature of the tax-rate estimates and the difficulty of international comparisons, writes Prescott, the model's predictions were “surprisingly close to the actual.” Tax Rates and Labor Supply 1993-96 Country Tax Rate (percent) Actual Hours Worked per Week per Person 15-64 Predicted Hours Worked per Week per Person 15-64 Difference (Predicted Minus Actual) Germany 59 19.3 19.5 0.2 France 59 17.5 19.5 2.0 Italy 64 16.5 18.8 2.3 Canada 52 22.9 21.3 -1.6 United Kingdom 44 22.8 22.8 0.0 Japan 37 27.0 29.0 2.0 United States 40 25.9 24.6 -1.3 Source: “ Why Do Americans Work So Much More Than Europeans ?” Federal Reserve Bank of Minneapolis Research Department Staff Report 321. Here, notes Prescott, “the important observation is that the low labor supplies in Germany, France and Italy are due to high tax rates. In these countries if someone works more and produces 100 additional euros of output, that individual gets to consume only 40 euros of additional consumption and pays directly or indirectly 60 euros in taxes.” Put in such stark terms, it seems obvious that many Europeans might opt to work less, while Americans and Japanese, taxed more lightly, would be keen to put in extra hours. Confirmation and implications Prescott found further confirmation for his hypothesis when he looked at tax rates and labor supply in the early 1970s (see table below). While his model's predictions of labor hours supplied diverge from the actual in several cases—Italy and Japan, in particular—Prescott observes that “when European and U.S. tax rates were comparable, European and U.S. labor supplies were roughly equal.” Tax Rates and Labor Supply 1970-74 Country Tax Rate (percent) Actual Hours Worked per Week per Person 15-64 Predicted Hours Worked per Week per Person 15-64 Difference (Predicted Minus Actual) Germany 52 24.6 24.6 0.0 France 49 24.4 25.4 1.0 Italy 41 19.2 28.3 9.1 Canada 44 22.2 25.6 3.4 United Kingdom 45 25.9 24.0 -1.9 Japan 25 29.8 35.8 6.0 United States 40 23.5 26.4 2.9 Source: “ Why Do Americans Work So Much More Than Europeans ?” Federal Reserve Bank of Minneapolis Research Department Staff Report 321. As for the outliers, Italy and Japan, Prescott suggests that other factors may be significant. In Italy, cartels may have played a role in depressing labor supply below its predicted value. In Japan, significant measurement errors in actual hours worked could account for the overly high prediction by the model. And what seems another anomaly is very likely an indirect confirmation of the importance of marginal tax rates on labor supply, according to Prescott. In the United States, actual hours worked per person increased by 10 percent from the 1970s to the 1990s, though the marginal tax rate remained at 40 percent. Prescott argues that U.S. tax reforms in the 1980s changed the effective marginal tax faced by married couples—dropping the rate in half for the second earner's income—even though it remained nominally at 40 percent. “In the 1993-96 [period],” he writes, “the marginal income tax on the labor income associated with switching between a one-earner and a two-earner household is only 20 percent, not 40 percent.” The issue warrants more attention, he says, and indeed, his colleagues Larry Jones, Rodolfo Manuelli and Ellen McGrattan have recently released a paper on this exact question. (See “ Wives at Work .”) On the whole, Prescott states, the results show that “people are remarkably similar across countries” and not only for these relatively prosperous and homogeneous nations, but for Chile, Mexico and Argentina, as well, where other economists have found similar relationships. “Apparently, idiosyncratic preference differences average out and result in the [representative] household having almost identical preferences across countries.” The policy implications are enormous for high-tax countries. If France were to lower its effective tax rate from 60 percent to 40 percent, estimates Prescott, its people would work more (taking 6.6 percent less leisure) and—remember their high productivity?—would generate considerably more output. Tax revenues wouldn't diminish, because the 40 percent rate would be levied on a higher base. And overall French “welfare gains,” as economists put it, would increase nearly 20 percent. In the United States, reducing marginal tax rates would have a more modest impact, according to the model: A 10 percent rate reduction would produce a 7 percent welfare gain. But even in the United States, Prescott's findings have huge implications for the viability of the Social Security system. (See “ Shrinking a deadweight loss .”) Foreign affairs In recent months, Prescott has traveled widely, presenting his findings not only to American audiences but to economists and policymakers in London, Berlin, Toulouse, Tokyo and elsewhere overseas. And in fact, says Prescott, Europeans tend to be more receptive than Americans. “The economists there understand that there is a problem,” he said after returning from France in mid-September. “I got some excellent suggestions when I presented the paper, the best so far.” But at all venues, he observes, the common denominator is surprise. Prescott is the first to admit that he, too, thought the results were startling, unexpected. “I find it remarkable that virtually all of the large difference in labor supply between France and the United States is due to differences in tax systems,” he writes in his Ely lecture. “I expected institutional constraints on the operation of labor markets and the nature of the unemployment benefit system to be more important.” Moreover, he concedes that cultural explanations might carry the day in a few settings. “Scandinavians seem to be a little bit different,” he said recently, referring to research by Richard Rogerson, an economist at Arizona State University. “My theory is when one of those Swedes looks at you when you're not working, it's pretty intimidating.” More seriously, he allows that in small, homogeneous cultures, social pressures can be quite strong. But even in large, heterogeneous nations, tax wedges don't always tell the whole story, according to Prescott. “Taxes are not the only reason that the labor factors differ,” says Prescott's Ely lecture. Unemployment benefits and housing subsidies—not taxes—distorted labor mobility in the United Kingdom between the first and second World Wars, contributing significantly to that country's interwar depression. New Deal policies supporting cartels in America's heavy industries distorted wages and employment in the last half of the 1930s, contributing to the depth and duration of the Great Depression in the United States. Similarly, cartels in 1970s Italy may have suppressed employment there. Prescott relies on work by University of California, Los Angeles economists Harold Cole and Lee Ohanian in making these conjectures. Still, while taxes aren't the all-powerful explanatory factor for all nations and eras, Prescott contends that in major developed countries in the time period under consideration, the labor supply impact of tax wedges is a powerful and undeniable fact. Other academics As befits the work of any prominent scholar, Prescott's theory has attracted close academic scrutiny—beyond the initial reaction of surprise—from both adherents and critics. In one recent paper, Peter Lindert, an economist at the University of California, Davis, refers to Prescott's study as dependent upon “a theoretical model heavily laden with assumptions. It is educated, intelligent, plausible fiction—but fiction nonetheless.” On the other hand (as Lindert points out) Prescott's model and findings are cited quite favorably by Nobel Laureate Robert Lucas in his 2003 presidential address to the American Economic Association. Lindert calls for empirical tests. Steven Davis at the University of Chicago Graduate School of Business and Magnus Henrekson of the Stockholm School of Economics oblige with a careful econometric analysis of the impact of labor income and consumption taxes on employment and work activity. In their study of rich countries in the mid-1990s, they find that a 12.8 percentage point difference in tax rates is associated with 122 fewer market work hours per adult per year and nearly a 5 percentage point decrease in employment—population ratios—an indirect affirmation of Prescott's theory. A very different perspective was presented earlier this year in a series of lectures by British economist Richard Layard, co-director of the Centre for Economic Performance at the London School of Economics. Layard takes issue with GDP itself as a satisfactory measure of human welfare—or utility, as Jeremy Bentham and subsequent economists have termed it—noting that “happiness has not increased, despite huge increases in living standards.” To summarize a lengthy argument, Layard's idea is that a tax wedge on labor income could actually increase utility by decreasing a sort of pollution: overwork brought on by the inherent human desire to do better than our peers, regardless of our absolute level of income. Keeping up with the Joneses, in other words, leads to overwork, ill health and unhappiness—rivalry distorts the leisure/labor decision. Appropriate public policy should diminish this pollution by taxing it. “In an efficient economy,” Layard writes, “there will be substantial levels of corrective taxation ... 60 percent would not seem inappropriate, and that is in fact the typical level of marginal taxation in Europe—if you allow for direct and indirect taxes.” Prescott responds Prescott's reactions to these ideas vary widely. Sitting in his seventh-floor office at the Minneapolis Fed, he reads through the first pages of Lindert's paper, then drops it on his desk. “It doesn't seem to be coherent,” he says. Davis and Henrekson's study, on the other hand, intrigues him. That might seem predictable given its broad support of Prescott's findings, but Davis and Henrekson employ a technique Prescott generally scorns: statistical regression. “Progress, don't regress,” he says with a smile, quoting the slogan featured prominently on his Internet home page. Regardless of their method, Prescott is drawn to the findings and has invited Davis to Minneapolis to get a closer look at their work. But Prescott's response to Layard's argument—more complete and nuanced—conveys a sense of Prescott himself. He begins by summarizing Layard's case in a phrase: “I'm happy if I have a lot more income—than you,” he says, grinning and quite aware that he does. As to the overwork such rivalry might cause, “that just says there's a consumption externality.” Then he conveys the concept with a story. “I always tried to create a positive externality in Pittsburgh for my neighbors who had these beautiful lawns,” he jokes of his grad school days at Carnegie Mellon University. “By my having a messy lawn, their lawns looked so much better. I mowed it, but I didn't do much else with my lawn. And it gave me utility to see them happier.” He tells the story with a verbal wink, acknowledging silently that his Pittsburgh yard care externality may well have been less than zero. The conspiratorial smile changes to professorial zeal as he begins to dissect Layard's reasoning: “Suppose everybody cares about relative consumption as well as own consumption. You work out the equilibrium, it's not Pareto optimal. Let's deal with the case where everybody enters symmetrically. So it's simple to make the ordering. Well, you can make everybody better off by just putting a tax on consumption so that they work less. That's a very standard model. Now what would be the empirical evidence for and against that?” In under five minutes, Prescott has crystallized an argument, communicated it to a visitor in plain language and personal anecdote, then converted it to the idiom of economics and laid out steps for its confirmation or refutation. It's vintage Prescott: analytically brilliant, unexpectedly funny and several beats ahead of everyone else. That last bit is the essence of a conversation with the economist. When you ask him a question, it sometimes seems that his reply is off-topic; then it dawns on you that Ed Prescott is answering the question you should have asked. A pattern of surprise Prescott's willingness to entertain alternatives, to listen to critics, to incorporate the unexpected is deeply characteristic of his work. That flexibility is, in fact, the paradoxical outcome of a rigid research discipline. In setting model parameters, for instance, or reporting research results, “the investigator has no degrees of freedom,” he says. “You have to tie your hands and if there's a deviation from your predictions, you report it. You can speculate on why, but you've got to be totally honest.” Intellectual honesty also means allowing findings to modify, even subvert initial hypotheses. It happens frequently, says Prescott. Much of the work for which he's best known—theories on time inconsistency, real business cycles, the equity premium and growth theory—has been developed in an ongoing process of research and revelation. “When I work out the implications, I'm quite often surprised: The findings change my views quite dramatically,” he says. “When I did the real business cycles work with Finn Kydland, I was certain that monetary shocks were the reason the economy fluctuated with the business cycles. Our findings were just the opposite. When I did some work with Rajnish Mehra on the equity premium puzzle, I was certain that the reason for the high historical difference in the return on equity relative to debt was just a premium for bearing aggregate, nondiversifiable risk. We found it wasn't.” For time inconsistency and the impact of taxes on labor supply, as well, surprise has been an intrinsic part of the process. Future direction As striking as his labor supply findings are—and though many aspects of it remain unresolved—Prescott senses that the big theoretical questions in economic growth lie elsewhere, and he is now turning his attention to them. “I think I've had my say on labor supply,” he concludes. In his Ely lecture, he lays out three sources of economic growth: capital, labor and productivity. The first two are important in understanding why some nations remain poor while others prosper, but the central question, contends Prescott, is what determines productivity? “Given productivity, our macro models are great,” he says. “But we treat it as exogenous. We've got to have a better understanding of mapping between policies and productivity.” In other words, what can governments do to enhance productivity? Prescott's main candidates are efficient financial markets, competition among producers and trading clubs. And currently, the last is his major focus. “What is a trading club?” he asks rhetorically. “Well, first, free movement of goods between the member states. But it's much, much more than that. ...” Prescott continues at length, with a discourse ranging from Toyota factories in Wales to trade among the U.S. states in the 19th century. He speaks quickly, and as he does there is a sense that each research question he asks leads him to a dozen more, each more interesting than the last. He will travel soon to Warsaw and then Bogotá to explore these ideas with other economists and policymakers. “It's going to be fascinating to see what's happening in Poland,” he remarks. In Colombia, “the president is trying to do some good things there, and we have to go down and help out.” He's not a policymaker himself. “I leave that to other people,” he says. “I'm no good at it. My comparative advantage is working out implications of theory.” And in so doing, it seems there is just one constraint: Even for Ed Prescott, a scholar who understands labor supply dynamics as well as anyone on earth, there are only 24 hours in a day. “Time,” observes the economist, “is the most valuable resource.” 1 The two assumptions: (1) that people decide between leisure and consumption based on their relative prices, at the margin, and (2) that in a competitive market, wages are equal to their marginal product of labor. The “key equilibrium relation” also depends on the share of a nation's output due to capital. Top of document Advanced Search Glossary See also: Shrinking a deadweight loss