Slow growing: economic expansion woes.
Author | Suderman, Peter |
Position | Citings - Brief article |
Is slow economic growth the new normal? Not necessarily, according to an October policy analysis from the Cato Institute, but growth has become more difficult.
Cato Senior Fellow Brink Lindsey points to four components of economic growth: labor participation, labor quality, capital investments, and "total-factor productivity," a measure of output for each unit of work. Historically, the fluctuation of these measures has been balanced: When some measures went down, others went up.
But recently all the components of growth have slowed simultaneously. People have been dropping out of the work force since 2000. Educational attainment levels are stunted by high-school graduation levels lower than they were four decades ago. Physical capital investments have slowed, and total factor productivity growth has declined since the 1990s.
Lindsey argues that slow growth in each of these areas is likely to continue...
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