There is a widespread desire to see faster economic growth. The belief is if the economic growth accelerates, then job growth will be stronger and wage and salaries will rise. How can we get the economy to expand more rapidly?
- two major determinants of economic growth – expansion of labor supply and increase in labor productivity
- since the end of the Great Recession –both have been slow
- labor supply slow due to aging population and low birth rates
- unlikely to change those
- can expand faster with more immigration and moving those who have dropped out of the labor force back in
- for labor productivity – improve with better education, as well as improved business investment – this is where tax law comes in