Commentary: Economic Forecasts: Why Bright Is Right

Score one for the growth optimists. The latest Commerce Dept. report indicates that the U.S. economy expanded by 3.4% from the fourth quarter of 1995 to the fourth quarter of 1996, with inflation of only 2.1%. This felicitous mixture of strong growth and stable prices was completely unforeseen by mainstream economists, most of whom believe the economy's potential growth rate--the speed at which it can expand without inflation taking off--is no more than 2.5%.

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