Labor productivity growth in the United States and other advanced countries has slowed dramatically since the mid-2000s, a major factor in their economic stagnation and political turmoil. Economists have been debating the causes of the slowdown and possible remedies for some years. Unaddressed in this discussion is what happens if the slowdown is not reversed.
In this volume, a dozen renowned scholars analyze the impact of sustained lower productivity growth on public finances, social protection, trade, capital flows, wages, inequality, and, ultimately, politics in the advanced industrial world. They conclude that slow productivity growth could lead to unpredictable and possibly dangerous new problems, aggravating inequality and increasing concentration of market power. Facing Up to Low Productivity Growth also proposes ways that countries can cope with these consequences.
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About the Author
Jeromin Zettelmeyer has been a senior fellow at the Peterson Institute for International Economics since September 2016 and was a nonresident senior fellow during 2013–14.
Adam S. Posen has been president of the Peterson Institute for International Economics since January 2013 after first joining in July 1997.
Table of Contents
Facing Up to Low Productivity Growth: Introduction Adam S. Posen Jeromin Zettelmeyer 1
I Fiscal Implications
1 Implications of Low Productivity Growth for Debt Sustainability Neil R. Mehrotra 15
2 Slow Productivity Growth Will Pressure Sovereign Debt Sustainability Elena Duggar 51
3 Implications of Lower Trend Productivity Growth for Tax Policy Karen Dynan 69
4 Effects of Low Productivity Growth on Fiscal Sustainability in the United States Louise Sheiner 87
5 Impact of a Productivity Slowdown on Pension Systems in Europe Axel Börsch-Supan 117
II International Implications
6 Productivity in Emerging-Market Economies: Slowdown or Stagnation? José De Gregorio 147
7 Living with Lower Productivity Growth: Impact on Exports Filippo di Mauro Bernardo Mottironi Gianmarco Ottaviano Alessandro Zona-Matrioli 185
III Implications for Wages, Distribution, and Politics
8 Productivity and Pay: Is the Link Broken? Anna Stansbury Lawrence H. Summers 207
9 Are Slower Productivity and Higher Inequality Related? Jason Furman Peter Orszag 245
10 Political Economy of Secular Stagnation: Why Capital in the United States Swipes Right Daniel W. Drezner 263
About the Contributors 285