1990s

After the pandemic recession, the right policy decisions resulted in a strong recovery and laid the foundations for another era of sustained productivity growth, similar to the 1990s. Sadly, in 2025, new policies are actively working against that dream.

The 1990s saw an extended period of full employment, high growth, and low inflation. Part of this achievement was attributable to healthcare cost control efforts undertaken by both public- and private-sector actors.

Whether or not we see another boom in productivity is a question of policy, not a question of fate.

Tight labor markets and strong investment are crucial to securing the three-legged stool of productivity growth, but a stable supply of the essentials may be the most important to focus on today.

The second leg of the productivity growth stool is a boom in fixed investment. This is the heart of productivity growth in many ways, and is critical to achieving disinflationary dynamics over the medium term.

For decades, “jobless recovery” has been a watchword in the aftermath of each recession. But in the 1990s—and today—we saw a fully recovered labor market.

"The Dream of the 90's" examines the macroeconomic conditions that led to strong growth in the late-1990s and what policies can revive that productivity growth today.