{"id":21913,"date":"2016-10-01T17:52:20","date_gmt":"2016-10-01T22:52:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21913"},"modified":"2016-10-01T17:52:20","modified_gmt":"2016-10-01T22:52:20","slug":"escaping-the-new-normal-of-weak-growth","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21913","title":{"rendered":"Escaping the New Normal of Weak Growth"},"content":{"rendered":"
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Escaping the New Normal of Weak Growth<\/a><\/h3>\n<\/header>\n
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MILAN \u2013 There is no question that the recovery from the global recession triggered by the 2008 financial crisis has been unusually lengthy and anemic. Some still expect an upswing in growth. But, eight years after the crisis erupted, what the global economy is experiencing is starting to look less like a slow recovery than like a new low-growth equilibrium. Why is this happening, and is there anything we can do about it?<\/p>\n

One potential explanation for this \u201cnew normal\u201d that has gotten a lot of attention is declining productivity growth. But, despite considerable data and analysis, productivity\u2019s role in the current malaise has been difficult to pin down \u2013 and, in fact, seems not to be as pivotal as many think.<\/p>\n

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Of course, slowing productivity growth is not good for longer-term economic performance, and it may be among the forces holding back the United States as it approaches \u201cfull\u201d employment. But, in much of the rest of the world, other factors \u2013 namely, inadequate aggregate demand and significant output gaps, rooted in excess capacity and underused assets (including people) \u2013 seem more important.<\/p>\n

In the eurozone, for example, aggregate demand in many member countries has been constrained by, among other things, Germany\u2019s large current-account surplus, which amounted to 8.5% of GDP in 2015. With higher aggregate demand and more efficient use of existing human capital and other resources, economies could achieve a significant boost in medium-term growth, even without productivity gains.<\/p>\n

None of this is to say that we should ignore the productivity challenge. But the truth is that productivity is not the principal economic problem right now.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Escaping the New Normal of Weak Growth MILAN \u2013 There is no question that the recovery from the global recession triggered by the 2008 financial crisis has been unusually lengthy and anemic. Some still expect an upswing in growth. But, eight years after the crisis erupted, what the global economy is experiencing is starting to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[11179,8402,14429],"class_list":["post-21913","post","type-post","status-publish","format-standard","hentry","category-economics","tag-michael-spence","tag-project-syndicate","tag-weak-economic-growth"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21913"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21913\/revisions"}],"predecessor-version":[{"id":21914,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21913\/revisions\/21914"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}