Macroeconomic Theory
Jeffrey Parker, Reed College
Paper of the week
Assigned paper
Gordon, Robert J. 2012. "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds." National Bureau of Economic Research Working Paper Series No. 18315.
Reading suggestions
- This paper has two main sections. The first looks at productivity growth and the prospects for continuing or accelerating technological progress. The second focuses on his "six headwinds" that will have to be overcome in the U.S.
- Gordon's key points emerge from the combination of productivity growth and headwinds that could hold it back. As you will quickly learn, he is a pessimist (and not all economists agree).
Questions for analysis
- What were the major sources of productivity growth associated with each of Gordon's three "industrial revolutions"? What is the record of economic growth resulting from each, both in terms of measured increase in per-capita GDP and in terms of living and working conditions?
- What point is Gordon making about the indutrial revolutions in his Figure 4? What are some of the reasons that he is pessimistic about the productivity prospects for the most recent revolution? Do you agree with his pessimism?
- Describe each of Gordon's six headwinds. Is each of these headwinds inevitable or are there policy changes that could offset it?
- Gordon's Figure 2 predicts a dire future for the United States. Is he correct?