My inaugural column for Forbes.com, "Avoiding the Coming Growth Slowdown," is now up. Here's a teaser:
Consider this puzzle. Compare economic performance in two periods: 1973-1990 versus 1990-2007. Both periods are 17 years in length; both begin and end with the last year of an economic expansion. In the earlier period, the U.S. economy weathered oil shocks, stagflation, and a punishing recession in the early ’80s, and growth in labor productivity in the nonfarm business sector limped along at a dismal 1.33 percent a year. In the latter period, prosperity was interrupted only by a pair of brief, mild recessions, and the IT revolution led a dazzling rebound in productivity growth up to 2.33 percent a year. Yet in 1973-1990, real gross domestic product per capita rose at an average annual rate of 1.93 percent – better than the 1.85 percent average annual growth rate during 1990-2007. How could that have happened?
Check out the whole thing.