Can Economic Growth Be Sustained? A Post-Malthusian Perspective
During the late 1990's, a spurt of growth in output and productivity led the business press, and some economists, to proclaim that the economy had entered a new era in which the old rules that governed cyclical and secular growth in the past no longer obtained. In the paper I present the results of a two sector economic growth model that demonstrates that as the share of the goods producing sectors (agriculture and manufacturing) continue to decline the service sector will have to bear almost the entire burden of sustaining productivity growth in the U.S. economy. A clear implication is that the rate of productivity growth, and the rate of output, will regress toward the rate of growth in its least productive sectors.
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