Fed Experts Deliver the Bad News: Productivity Slump Is for Real
- Slowdown means 2015 GDP was $3 trillion lower than otherwise
- Smaller efficiency gains not a mirage of mis-measurement
UBS’s Matus Says Fed Will ‘Take Cowards Way Out’
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It’s a paradox that’s been puzzling economists for a while. How can U.S. productivity growth be slowing down at the same time that innovation in everything from smartphones to 3D printing seems to be speeding up?
A trio of economists from the Federal Reserve and the International Monetary Fund think they have the answer and it’s not particularly pretty. They argue in a new paper that the down-shift in productivity is for real. It’s not a mirage of mis-measurement by government statisticians unable to keep up with rapidly changing technology.