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Is Slow Still the New Normal for GDP Growth?

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  • John G. Fernald
  • Huiyu Li

Abstract

Estimates suggest the new normal pace for U.S. GDP growth remains between 1% and 1%, noticeably slower than the typical pace since World War II. The slowdown stems mainly from demographic trends that have slowed labor force growth, about which there is relatively little uncertainty. A larger challenge is productivity. Achieving GDP growth consistently above 1% will require much faster productivity growth than the United States has typically experienced since the 1970s.

Suggested Citation

  • John G. Fernald & Huiyu Li, 2019. "Is Slow Still the New Normal for GDP Growth?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfel:00197
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    File URL: https://www.frbsf.org/economic-research/files/el2019-17.pdf
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    References listed on IDEAS

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    1. Andreas Hornstein & Marianna Kudlyak, 2019. "Aggregate Labor Force Participation and Unemployment and Demographic Trends," Working Paper Series 2019-7, Federal Reserve Bank of San Francisco.
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    Cited by:

    1. Georgina Maria Tinungki & Powell Gian Hartono & Robiyanto Robiyanto & Agus Budi Hartono & Jakaria Jakaria & Lydia Rosintan Simanjuntak, 2022. "The COVID-19 Pandemic Impact on Corporate Dividend Policy of Sustainable and Responsible Investment in Indonesia: Static and Dynamic Panel Data Model Comparison," Sustainability, MDPI, vol. 14(10), pages 1-23, May.
    2. Mary C. Daly, 2022. "Policy Nimbleness Through Forward Guidance," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2022(17), pages 1-07, June.

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