Is it still possible to get a 3% growth economy?

The Washington Post points out that “Trump struggles to achieve 3% economic goal as growth slows.” Of course, President Trump is struggling. But it would be much the same for any American president in 2019. Whether the magic policy wand conjures up tax cuts or infrastructure spending, there are two real-world constraints on faster sustained economic growth. As I noted in my post on GDP Friday, ” … 3% is an ambitious growth target ⁠— much less 4% or 5% ⁠— given demographics and chronically weak productivity growth.”

Both present thorny policy and political problems. Regarding demographics, higher immigration is an obvious path forward, though not so obvious to many Washington policymakers. Even the risk of losing out on high-skill techies seems to be an inadequate catalyst for positive action. And good luck launching a baby boomlet, though some scholars think policies promoting better work-life balance might help.

That leaves faster innovation-driven productivity growth. But it’s unclear at best whether the digital economy is currently boosting growth. But what about tomorrow? A new Moody’s report argues, “Digital technologies have the potential to spur a global productivity boom, which will be especially important as productivity growth in many countries is at all-time lows. Digital technologies can mitigate the negative effects of population aging on global growth.” From the report:
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