Robert Gordon's latest working paper: "Why has economic growth slowed when innovation appears to be accelerating?

From the eminent Robert Gordon of Northwestern University, a new working paper on the productivity slowdown in the West. 

Abstract:

Measured between quarters with identical unemployment rates, U. S.  economic growth slowed by more than half from 3.2 percent per year during 1970-2006 to only 1.4 percent during 2006-16, and only half of this GDP growth slowdown is accounted for diminished productivity growth.  The paper starts from the proposition that GDP growth matters, not just productivity growth, because slower GDP growth provides fewer resources to address the nation's problems, including faltering education, aging infrastructure, and the looming shortfall in funding for Social Security and Medicare, and it also implies lower net investment and a reduced rate at which new capital can embody the latest technology.   

The paper documents the contribution to slower GDP growth of the separate components of demography -- fertility, mortality, life expectancy, and immigration.  Particular emphasis is placed on the interaction between rising inequality and the slower secular rise of life expectancy in the U.S. compared to other developed countries, both in the form of a large gap in life expectancy between rich and poor, and the stagnation of life expectancy for the lowest income quintile.  Further contributions to slowing growth are made by a decline in the population share of both legal and illegal immigration and a turnaround from rising to declining labor force participation.  Rising inequality creates a gap between the growth of average real per-capita income relative to that of median real income, and alternative measures of the evolution of this gap are compared and assessed. 

Read more of the abstract at NBER.

Robert J. Gordon's opus: The Rise and Fall of American Growth

Robert Gordon's magisterial work on economic growth has made it to the top of my reading stack. 

He is becoming one of my favorite economists.  

Here's Ed Glaeser's review from the Wall Street Journal.

Is There a Productivity Miracle Lurking in the Economy? - WSJ

From the Streewise column in the Wall Street Journal, Is There a Productivity Miracle Lurking in the Economy?

Perhaps 2018 will be the year productivity finally begins to pick up. Technologies such as speech recognition, online chatbots and machine learning are being quickly adopted, capital spending is picking up and tight labor markets give companies an incentive to find better ways of working.

But productivity defies forecasters, and the lesson of the past is to be humble. This is a story of how little anyone really understands about what moves productivity, even though it’s the key to long-run prosperity—and to what happens to inflation and share and bond prices.