Sluggish Productivity Growth since Late 2005
I'm puzzled by McGrattan and Prescott, "Taxes, Regulation, and Asset Pricing"

Competition for American Producers from High-Cost First-World Labor

Toyota Rising:

Toyota Could Become World's No. 1 Car Maker in 2007 - By YOSHIO TAKAHASHI and ANDREW MORSE December 22, 2006 12:12 p.m. NAGOYA, Japan -- Toyota Motor Corp. said Friday it aims to produce 9.42 million vehicles next year, a level that will likely vault it past struggling U.S. auto giant General Motors Corp. as the world's top car maker.

Toyota's new production targets represent a 4% increase from the 9.04 million vehicles the Nagoya-based company expects to produce in 2006. Indicative of Toyota's increasing reliance on foreign markets: Overseas production will jump 8% to 4.27 million vehicles, while domestic production will rise just 1% to 5.15 million vehicles.

GM, which hasn't released a forecast for next year's production, expects to build 9.18 million vehicles in 2006, up from the 9.11 million vehicles it produced in 2005.

Though widely expected, Toyota's official production plans highlight the diverging fortunes of the world's two truly global car companies. Toyota has ramped up production in North America, Asia and other parts of the world to take advantage of surging demand for its fuel-efficient passenger cars, such as the Camry and the hybrid Prius. It plans to open new plants in China, Thailand and Russia to meet demand for its cars.

Meanwhile, GM is in the midst of a painful restructuring after racking up a $10 billion loss last year. The Detroit-based company has already posted $3 billion in losses this year as sales of big sport-utility vehicles and trucks falter amid persistently high oil prices. The company plans to shutter more factories as part of its restructuring.