In a new paper, the
Northwestern economist Robert J. Gordon argues that the United States
should get ready for an extended period of slowing growth, with economic
expansion getting ever more sluggish and the bottom 99 percent getting
the short end of the (ever-slower-growing) stick.
“A provocative ‘exercise in subtraction’ suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades,” he writes.
To put that in context, American households’ real consumption expanded by about 3 percent a year before the recession hit and has been growing about 2 percent a year during the recovery, according to statistics from the Organization for Economic Cooperation and Development.
Mr. Gordon’s paper joins a growing economic literature that seeks and fails to find new sources of bang-up growth. (See Tyler Cowen’s wonderful “The Great Stagnation” for more on that.)
In the past, the United States economy grew quickly and its citizens got richer, in no small part because of advances made in three consecutive industrial revolutions: steam engines and railroads first; electricity, indoor plumbing and the combustion engine second; and the computing revolution third.
Read more: http://economix.blogs.nytimes.com/2012/08/28/a-dismal-outlook-for-growth/
“A provocative ‘exercise in subtraction’ suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades,” he writes.
To put that in context, American households’ real consumption expanded by about 3 percent a year before the recession hit and has been growing about 2 percent a year during the recovery, according to statistics from the Organization for Economic Cooperation and Development.
Mr. Gordon’s paper joins a growing economic literature that seeks and fails to find new sources of bang-up growth. (See Tyler Cowen’s wonderful “The Great Stagnation” for more on that.)
In the past, the United States economy grew quickly and its citizens got richer, in no small part because of advances made in three consecutive industrial revolutions: steam engines and railroads first; electricity, indoor plumbing and the combustion engine second; and the computing revolution third.
Read more: http://economix.blogs.nytimes.com/2012/08/28/a-dismal-outlook-for-growth/
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