U.S. Long-Term Growth Rate: Has It Increased?

Publication Date: January 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Economics

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Abstract:

The pace of long-term growth is the bulwark of a rising living standard, and even small rises in this trend will generate large gains in material well-being from one generation to the next. The pace of economic growth also has important implications for tax revenues and outlays for pension funding. Since 1995 the U.S. economy has experienced a strong acceleration of economic growth, propelled by a resurgence of productivity growth. Is this the beginning of a new era for economic growth? Has the computer and communications revolution begun to pay productivity dividends? Economic theory and evidence do not suggest that long-term growth is likely to show a great degree of variability, although some increase is possible. Detailed analysis of recent U.S. productivity growth gives an uncertain picture of whether current growth shows the degree of dispersion across sectors of the economy to propel the economy at a far faster long-term pace. This product will not be updated.