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.