Eddie Lazear Is a Productivity Optimist
Eddie Lazear is an aggregate productivity-growth optimist:
White House Sees Strong Productivity - WSJ.com: JOHN D. MCKINNON February 12, 2007; Page A6 WASHINGTON -- President Bush's economic team predicts rapid gains in U.S. productivity can continue for the foreseeable future.... From 2000 to 2005, productivity -- a measure of the goods and services produced per hour of work -- has increased at about 3% a year, higher even than the 2.5% growth during the late 1990s....
In recent months, White House economists said productivity gains finally have begun delivering another benefit: higher real earnings for ordinary workers. Administration officials are optimistic they will see more productivity-driven earnings growth in the years ahead....
Most economic forecasters, however, doubt the U.S. economy can maintain a 3% productivity pace in the next decade, and there are signs that productivity growth is tapering off. The new White House budget relies on an economic forecast -- largely comparable with private-sector predictions -- that implicitly sees productivity growth of about 2% a year for the next five years.... Going forward, productivity gains will depend on continued strong investment and increased efficiency but also on increasing workers' skills, the report said.... Future breakthroughs in alternative energy sources and improving efficiency in the health-care sector could provide big sources of productivity gains, comparable to the high-tech revolution of the 1980s and 1990s, Mr. Lazear said...
