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As productivity numbers go, 2% is huge!!. The actual number is 2.46% (from Bob Gordon's own figures) [1]. To put this in perspective, this is one of the highest

by npalli 11y ago

As productivity numbers go, 2% is huge!!. The actual number is 2.46% (from Bob Gordon's own figures) [1]. To put this in perspective, this is one of the highest growth numbers in the entire history of the US. Decade wise the only period that had growth larger than 2.46% was the '30s. The economy has grown about 15 times (in real times) since then. If we can get 2.46% on a 18 Trillion economy we will double our per capita in less than 30 years. This is in real terms. A truly astonishing accomplishment. More importantly though, Bob Gordon is predicting that this number will drop to 0.2% due to six headwinds. In turn he suggests our per capita doubling will take a CENTURY going forward. [1] http://www.voxeu.org/article/us-economic-growth-over http://www.voxeu.org/article/us-economic-growth-over

akamaka 11y ago
Thanks for your response, you make excellent points. I agree that his worst case scenarios are silly, and would only happen in unprecedented circumstances that are far outside the scope of a discussion about productivity. However, I think 2% is quite low compared to our expectations. It feels like we should be living in a revolutionary age where productivity growth is accelerating, and looking at the actual numbers has been sobering. We have incredible technology like AI, 3D printing, and robotics, but we haven't been able to leverage them to much effect. Much of our growth is coming from slowly expanding on the same simple techniques that the generations before us pioneered -- building ever bigger ships, creating larger marketplaces, extending education. With finite resources on this planet, there are only two possibilities: either we can get used to overall economic growth slowing down, or we find a way to massively increase productivity to make up for the slack. I want to see the latter, but seeing the numbers convinces me that we won't get there on the road that we're on.
- lhopki01 11y ago
  I think the reason 2% is viewed as low compared to expectations is not understanding how it compounds. 2% means a doubling of the economy in 35 years. 2% means that in the space of an average lifespan the economy will be almost 5 times larger in real terms. Now granted it won't be distributed evenly but if you told someone that the country will be 5 times more productive by the time their baby is 80 they'll be impressed. That's before you consider the fact many countries have not yet experienced the productivity growth of electricity and computers to their full meaning they can achieve much higher than 2% growth.

by npalli 11y ago

akamaka 11y ago

Thanks for your response, you make excellent points. I agree that his worst case scenarios are silly, and would only happen in unprecedented circumstances that are far outside the scope of a discussion about productivity. However, I think 2% is quite low compared to our expectations. It feels like we should be living in a revolutionary age where productivity growth is accelerating, and looking at the actual numbers has been sobering. We have incredible technology like AI, 3D printing, and robotics, but we haven't been able to leverage them to much effect. Much of our growth is coming from slowly expanding on the same simple techniques that the generations before us pioneered -- building ever bigger ships, creating larger marketplaces, extending education. With finite resources on this planet, there are only two possibilities: either we can get used to overall economic growth slowing down, or we find a way to massively increase productivity to make up for the slack. I want to see the latter, but seeing the numbers convinces me that we won't get there on the road that we're on.

lhopki01 11y ago
I think the reason 2% is viewed as low compared to expectations is not understanding how it compounds. 2% means a doubling of the economy in 35 years. 2% means that in the space of an average lifespan the economy will be almost 5 times larger in real terms. Now granted it won't be distributed evenly but if you told someone that the country will be 5 times more productive by the time their baby is 80 they'll be impressed. That's before you consider the fact many countries have not yet experienced the productivity growth of electricity and computers to their full meaning they can achieve much higher than 2% growth.