Karl Marx, First Real Business Cycle Theorist: Hoisted from the Archives

There are still no signs of any acceleration in measured productivity growth from the low "new normal" that emerged with the financial crisis of 2007-9. Least of all are there signs of an acceleration in investment and productivity growth produced by the late-2017 McConnell-Ryan-Trump tax cut. Moreover, the growth rate of the labor force now falls off of a demographic cliff. If there were a moment over the past two and a half centuries when we would like for the economy's sake for immigration to be higher than usual, it is now:

John Fernald and Huiyu Li: Is Slow Still the New Normal for GDP Growth?: "Estimates suggest the new normal pace for U.S. GDP growth remains between 1½% and 1¾%, noticeably slower than the typical pace since World War II. The slowdown stems mainly from demographic trends that have slowed labor force growth, about which there is relatively little uncertainty. A larger challenge is productivity. Achieving GDP growth consistently above 1¾% will require much faster productivity growth...


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