Andrés Velasco became the founding dean of @LSEPublicPolicy in 2018. He was then only Full professor. He leaves the job this month with nine tenured faculty, five profs of practice and three teaching track faculty, over 450 students from 58 countries and five degree programmes, including double degrees with Sciences Po, Columbia and Toronto. Institution-building is one of the hardest jobs in academia, Andrés has succeeded in just 8 years. Happily, he remains on the faculty. Thank you, Andrés.

.@paulkrugman has argued Europe is not suffering an economic decline relative to the United States using Purchasing Power Parities. In this post (a revision, without paywall, of our @ProSyn one on Friday), @Ph_Aghion @a_bergeaud and I explain why a chain of current purchasing power parity (PPP) indexes tells us nothing useful about productivity growth. We make four points: First, a PPP measures purchasing power across places at one moment; a deflator compares prices across time in one place. A sequence of current-PPP comparisons is not a measure of real growth, because the prices used to value output change from year to year. Second, the two indexes need not agree. Difference the current-PPP comparison of France and the US across years and you recover the difference in their real growth plus a price residual. By 2024 the two are roughly 18 log points apart, enough to neutralize nearly all the measured growth divergence between France and America. This is due to two reasons Technology (our third point): where products improve fastest, as in information technology, the gap is largest. If a country doubles its computer output while the international price of computers halves, current PPP records no increase in value. (We all agree here.) Fourth, the baskets. It is impossible to find a basket of products that is simultaneously representative within each country, comparable across countries, and stable through time. (A novel point in the discussion). Convert GDP every year with a current PPP and French output per hour grows at a similar rate to the US. The match is built by the conversion. Nothing in it measures how much more either country produced. Krugman has now answered to our column, in a post dated May 30. I think we are not that far. We agree that European productivity growth has trailed the US for three decades; a current-PPP chain and a national deflator answer different questions; and the weighting mechanism is part of the story. We disagree on one. Krugman reads the flat current-PPP line as evidence Europe is not falling behind; we see it as the product of moving the price measurement stick every year. Finally, like @MESandbu on Friday in the @ft, @paulkrugman suggests as reductio ad absurdum that we should be willing to accept, if we believe our numbers, that the NL was way ahead of the US average in 2000 and declining ever since. We do not find the counter-example compelling. The counter example shows a clear decline of the Netherlands over a long period of time. That is the point!. Our claim (see my two Europes post): 1. Core Europe was very close to the US or higher 2 decades ago. 2. Every year since then we have seen much slower productivity growth. This has become particularly dire more recently. 3. This matters, particularly for our influence, our ability to sustain our welfare states, and our ability to pay for defense and other market goods. siliconcontinent.com/p/the-m…