As part of my latest piece on Fed policy, I asked several top economists for their forecast of long-term productivity growth. The exact question for the mini-survey was:
What do you think the sustainable rate of productivity growth is likely to be over the next few years? (I’d prefer a single number, but a range would be okay too)
This is obviously a key question for Fed policy, forecasts of future tax revenues, U.S. competitiveness, American well-being, and basically anything that has to do with the future. High numbers are good, low numbers are bad.
The current mini-survey shows that the range of answers has compressed (see below). The forecasts now run from 2.25% to 2.5%. I didn’t do an average, since the range was so narrow.
But that’s still pretty good. The long-term historical average since World War II is 2.2%, the ten year average is 2.56%.
The one cautionary note, which I raise in the story, is that long-term productivity trends can shift unexpectedly. And the recent slowdown in reported productivity does worry me.
|The Productivity Consensus|
|Expected long term productivity growth|
|Hal Varian||2.5||University of California at Berkeley|
|Alan Krueger||2.5||Princeton University|
|Dale Jorgenson||2.4||*||Harvard University|
|Bill Nordhaus||2.3||Yale University|
|Martin Baily||2.25||Brookings Institution|
|Kevin Hassett||2.25||American Enterprise Institute|