SlideShare ist ein Scribd-Unternehmen logo
1 von 13
Downloaden Sie, um offline zu lesen
Congressional Budget OfficeCongressional Budget Office
NABE Foundation
17th Annual Economic Measurement Seminar
September 1, 2020
Robert Shackleton
Macroeconomic Analysis Division
CBO’s Economic Forecast: Understanding the
Slowdown of Productivity Growth
1
CBO
The forecast is used primarily as an input to CBO’s 10-year federal budget
projections and analyses of legislative proposals.
It is a current-law forecast:
 It incorporates the assumption that legislation will not change but that changes
in policy built into current legislation will occur.
 For example, current tax law provides for the expiration of certain provisions
within the next 10 years.
 CBO’s current forecast projects economic responses to the expiration of those
provisions.
The Purpose of CBO’s Economic Forecast
2
CBO
CBO’s approach involves projections of:
 Potential (maximum sustainable) output in a neoclassical growth framework
and
 Actual output in a standard macroeconometric model.
The estimate of potential output is mainly based on estimates of:
 The potential labor force,
 The flow of services from the capital stock, and
 Potential total factor productivity in the nonfarm business sector.
CBO’s Approach to Forecasting
3
CBO
GDP = gross domestic product. Real values are nominal values that have been adjusted to remove the effects of changes in prices.
Average Annual Growth of Real Potential GDP
4
CBO
GDP = gross domestic product.
Historical Periods Projection
1950–
2019
1950–
1973
1974–
1981
1982–
1990
1991–
2001
2002–
2007
2008–
2019
2020–
2030
Overall Economy
Potential Output 3.2 4.0 3.1 3.4 3.2 2.6 1.6 1.8
Potential Labor Force 1.4 1.6 2.5 1.6 1.2 1.0 0.5 0.4
Potential Labor Productivity 1.7 2.4 0.6 1.7 2.0 1.6 1.1 1.4
Nonfarm Business Sector
Potential Output 3.4 4.1 3.5 3.6 3.6 2.9 1.8 2.1
Potential hours 1.3 1.4 2.3 1.8 1.2 0.4 0.5 0.4
Capital services 3.4 3.8 3.8 3.6 3.9 2.9 2.4 2.1
Potential total factor productivity 1.4 1.9 0.7 1.3 1.5 1.7 0.7 1.1
Potential Labor Productivity 2.1 2.7 1.2 1.8 2.4 2.5 1.3 1.7
Key Estimates in CBO’s Projection of Potential GDP, July 2020
Average Annual Percentage
Growth, by Calendar Year
5
CBO
Vertical bars indicate the duration of recessions.
Total Factor Productivity in Nonfarm Business Since 2000
6
CBO
The slowdown began around 2005, before the financial crisis and the recession.
It is widespread among industries and international in scope.
Five areas of inquiry might shed light on the slowdown:
 Measurement issues
 Growth feedbacks
 Demographic effects
 Structural issues
 A slowdown in basic innovation
Why Has the Growth of Total Factor Productivity Slowed?
7
CBO
Mismeasurement of real (inflation-adjusted) inputs and outputs is persistent.
However, measurement issues can account for only a small portion of the
slowdown of total factor productivity growth:
 Mismeasurement does not appear to be worse than it was in the past.
 Products no longer measured in output have relatively modest value to
consumers compared with “missing” growth in total factor productivity. An
example is digital photographs, which have largely replaced printed ones and
do not show up in GDP.
 Measurement errors related to international supply chains are thought to
explain less than 0.1 percentage point of the slowdown of growth of estimated
total factor productivity per year.
The Slowdown of Growth of Total Factor Productivity:
Measurement Issues
8
CBO
Growth of the labor supply has slowed dramatically.
Aggregate demand recovered slowly in the aftermath of the recession.
Both developments have led to relatively modest demand for capital investment.
The net result is slower turnover of the capital stock and slower introduction of
new technologies.
However, there is little evidence of a backlog of technology.
The Slowdown of Growth of Total Factor Productivity:
Growth Feedbacks
9
CBO
Highly skilled and well-educated baby boomers are retiring, lowering the
aggregate level of human capital.
However, skilled and experienced workers tend to stay in the labor force
longer, pushing up the average skill level.
Educational attainment has grown more slowly than in previous generations
because it is already at a high level.
However, educational attainment among younger cohorts has continued to
improve, especially during the recession and its slow recovery.
The Slowdown of Growth of Total Factor Productivity:
Demographic Effects
10
CBO
There is declining dynamism in the economy:
 Top firms in many industries continue to have strong productivity growth, but
other firms increasingly lag behind.
 Rates of firms’ entry and exit have declined.
 The share of employment and output accounted for by young firms (historically
a source of productivity growth) has fallen.
But there is no consensus on the causes:
 Are barriers to entry getting higher?
 Are product markets becoming less contestable?
Restrictive land-use regulations increasingly raise housing costs and discourage
workers from migrating to denser urban areas, where most growth in productivity
occurs.
The Slowdown of Growth of Total Factor Productivity:
Structural Issues
11
CBO
The pessimistic view:
 Innovation from the late nineteenth century through the early 1970s was unique and
unsustainable.
 Acceleration in total factor productivity during the 1990s and 2000s was a temporary
deviation related to information technology.
 We are “running out of ideas”: Research costs are rising, and new ideas are not as
economically significant.
The optimistic view:
 The pool of potential innovators and the potential market for products are now global.
 Research tools are greatly improved.
 Communication of innovations is much more rapid.
 Major advances in technology can be expected—but because they diffuse slowly,
their economic impact will take time.
The Slowdown of Growth of Total Factor Productivity:
A Slowdown in Basic Innovation
12
CBO
Congressional Budget Office, An Update to the Economic Outlook: 2020 to 2030
(July 2020), www.cbo.gov/publication/56442.
Robert Shackleton, Estimating and Projecting Potential Output Using CBO’s
Forecasting Growth Model, Working Paper 2018-03 (Congressional Budget
Office, February 2018), www.cbo.gov/publication/53558.
Additional Information

Weitere ähnliche Inhalte

Was ist angesagt?

Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remain
Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remainItaly 2017 OECD Economic Survey Reforms are paying off, but challenges remain
Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remainOECD, Economics Department
 
Oecd going for growth 2016
Oecd   going for growth 2016Oecd   going for growth 2016
Oecd going for growth 2016Paolo Soro
 
AS Micro: Introductory Economic Concepts
AS Micro: Introductory Economic ConceptsAS Micro: Introductory Economic Concepts
AS Micro: Introductory Economic Conceptstutor2u
 
Today’s Economic Landscape and What’s on the Other Side
Today’s Economic Landscape and What’s on the Other SideToday’s Economic Landscape and What’s on the Other Side
Today’s Economic Landscape and What’s on the Other SideSavannah Whaley
 
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...OECD, Economics Department
 
Economic indicators may 2013
Economic indicators may 2013Economic indicators may 2013
Economic indicators may 2013SappiHouston
 
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...iosrjce
 
Econ789 chapter030
Econ789 chapter030Econ789 chapter030
Econ789 chapter030sakanor
 
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...OECD, Economics Department
 
Subsidies for innovative start ups and firm entry - Antonio Accetturo
Subsidies for innovative start ups and firm entry - Antonio AccetturoSubsidies for innovative start ups and firm entry - Antonio Accetturo
Subsidies for innovative start ups and firm entry - Antonio AccetturoOECD CFE
 
FinLight Research - Market Perspectives - Nov 2013
FinLight Research - Market Perspectives - Nov 2013FinLight Research - Market Perspectives - Nov 2013
FinLight Research - Market Perspectives - Nov 2013Zouheir Ben Tamarout
 
Effects of economic incentives on business start ups in the US: County level ...
Effects of economic incentives on business start ups in the US: County level ...Effects of economic incentives on business start ups in the US: County level ...
Effects of economic incentives on business start ups in the US: County level ...OECD CFE
 
Etude PwC sur les écarts salariaux (2013)
Etude PwC sur les écarts salariaux (2013)Etude PwC sur les écarts salariaux (2013)
Etude PwC sur les écarts salariaux (2013)PwC France
 
Week 8 in manufacturing news
Week 8 in manufacturing newsWeek 8 in manufacturing news
Week 8 in manufacturing newsMRPeasy
 
Nar Economic update
Nar Economic updateNar Economic update
Nar Economic updateAnthony
 
Today’s Business Landscape and What’s on the Other Side
Today’s Business Landscape and What’s on the Other SideToday’s Business Landscape and What’s on the Other Side
Today’s Business Landscape and What’s on the Other SideSavannah Whaley
 

Was ist angesagt? (20)

Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remain
Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remainItaly 2017 OECD Economic Survey Reforms are paying off, but challenges remain
Italy 2017 OECD Economic Survey Reforms are paying off, but challenges remain
 
Oecd going for growth 2016
Oecd   going for growth 2016Oecd   going for growth 2016
Oecd going for growth 2016
 
AS Micro: Introductory Economic Concepts
AS Micro: Introductory Economic ConceptsAS Micro: Introductory Economic Concepts
AS Micro: Introductory Economic Concepts
 
Today’s Economic Landscape and What’s on the Other Side
Today’s Economic Landscape and What’s on the Other SideToday’s Economic Landscape and What’s on the Other Side
Today’s Economic Landscape and What’s on the Other Side
 
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...
Exiting from the low-growth trap: Investment, OECD Parliamentary Days 9 Febru...
 
John Fernald
John FernaldJohn Fernald
John Fernald
 
Economic indicators may 2013
Economic indicators may 2013Economic indicators may 2013
Economic indicators may 2013
 
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...
Macroeconomic Determinants of Investment Decision in Nigeria: IS-LM-BP-RP App...
 
Productivity - Canada - 2Q17
Productivity - Canada - 2Q17Productivity - Canada - 2Q17
Productivity - Canada - 2Q17
 
Econ789 chapter030
Econ789 chapter030Econ789 chapter030
Econ789 chapter030
 
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...
Euro area-european-union-enhancing-european-cooperation-oecd-economic-survey-...
 
Economic Presentation
Economic PresentationEconomic Presentation
Economic Presentation
 
Subsidies for innovative start ups and firm entry - Antonio Accetturo
Subsidies for innovative start ups and firm entry - Antonio AccetturoSubsidies for innovative start ups and firm entry - Antonio Accetturo
Subsidies for innovative start ups and firm entry - Antonio Accetturo
 
World Bank Group Support to Public-Private Partnerships: Event Launch at IFC ...
World Bank Group Support to Public-Private Partnerships: Event Launch at IFC ...World Bank Group Support to Public-Private Partnerships: Event Launch at IFC ...
World Bank Group Support to Public-Private Partnerships: Event Launch at IFC ...
 
FinLight Research - Market Perspectives - Nov 2013
FinLight Research - Market Perspectives - Nov 2013FinLight Research - Market Perspectives - Nov 2013
FinLight Research - Market Perspectives - Nov 2013
 
Effects of economic incentives on business start ups in the US: County level ...
Effects of economic incentives on business start ups in the US: County level ...Effects of economic incentives on business start ups in the US: County level ...
Effects of economic incentives on business start ups in the US: County level ...
 
Etude PwC sur les écarts salariaux (2013)
Etude PwC sur les écarts salariaux (2013)Etude PwC sur les écarts salariaux (2013)
Etude PwC sur les écarts salariaux (2013)
 
Week 8 in manufacturing news
Week 8 in manufacturing newsWeek 8 in manufacturing news
Week 8 in manufacturing news
 
Nar Economic update
Nar Economic updateNar Economic update
Nar Economic update
 
Today’s Business Landscape and What’s on the Other Side
Today’s Business Landscape and What’s on the Other SideToday’s Business Landscape and What’s on the Other Side
Today’s Business Landscape and What’s on the Other Side
 

Ähnlich wie CBO’s Economic Forecast: Understanding the Slowdown of Productivity Growth

CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCongressional Budget Office
 
CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCongressional Budget Office
 
CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCongressional Budget Office
 
CBO’s 10-Year Economic Forecast and How It Is Produced
CBO’s 10-Year Economic Forecast and How It Is ProducedCBO’s 10-Year Economic Forecast and How It Is Produced
CBO’s 10-Year Economic Forecast and How It Is ProducedCongressional Budget Office
 
Confronting the zombies: policies for productivity revival
Confronting the zombies: policies for productivity revivalConfronting the zombies: policies for productivity revival
Confronting the zombies: policies for productivity revivalStructuralpolicyanalysis
 
A2 & AS Economics: UK Economy Revision Briefing
A2 & AS Economics: UK Economy Revision BriefingA2 & AS Economics: UK Economy Revision Briefing
A2 & AS Economics: UK Economy Revision Briefingtutor2u
 
T4 industry familiarisation_book_may_2011
T4 industry familiarisation_book_may_2011T4 industry familiarisation_book_may_2011
T4 industry familiarisation_book_may_2011Alex
 
As current growth rates reach a new low, competition for the future is on the...
As current growth rates reach a new low, competition for the future is on the...As current growth rates reach a new low, competition for the future is on the...
As current growth rates reach a new low, competition for the future is on the...SimCorp
 
Apple Business Strategy
Apple Business StrategyApple Business Strategy
Apple Business StrategyJessica Tanner
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
 
Understanding And Applying Gdp And Productivity And The...
Understanding And Applying Gdp And Productivity And The...Understanding And Applying Gdp And Productivity And The...
Understanding And Applying Gdp And Productivity And The...Kelly Lindemann
 
OECD-Wirtschaftsausblick Juni 2016
OECD-Wirtschaftsausblick Juni 2016OECD-Wirtschaftsausblick Juni 2016
OECD-Wirtschaftsausblick Juni 2016OECD Berlin Centre
 

Ähnlich wie CBO’s Economic Forecast: Understanding the Slowdown of Productivity Growth (20)

CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity Growth
 
CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity Growth
 
CBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity GrowthCBO’s Economic Forecast: Understanding Productivity Growth
CBO’s Economic Forecast: Understanding Productivity Growth
 
CBO’s 10-Year Economic Forecast and How It Is Produced
CBO’s 10-Year Economic Forecast and How It Is ProducedCBO’s 10-Year Economic Forecast and How It Is Produced
CBO’s 10-Year Economic Forecast and How It Is Produced
 
R&D Spending Debate 2014 LinkedIn
R&D Spending Debate 2014 LinkedInR&D Spending Debate 2014 LinkedIn
R&D Spending Debate 2014 LinkedIn
 
Confronting the zombies: policies for productivity revival
Confronting the zombies: policies for productivity revivalConfronting the zombies: policies for productivity revival
Confronting the zombies: policies for productivity revival
 
A2 & AS Economics: UK Economy Revision Briefing
A2 & AS Economics: UK Economy Revision BriefingA2 & AS Economics: UK Economy Revision Briefing
A2 & AS Economics: UK Economy Revision Briefing
 
T4 industry familiarisation_book_may_2011
T4 industry familiarisation_book_may_2011T4 industry familiarisation_book_may_2011
T4 industry familiarisation_book_may_2011
 
As current growth rates reach a new low, competition for the future is on the...
As current growth rates reach a new low, competition for the future is on the...As current growth rates reach a new low, competition for the future is on the...
As current growth rates reach a new low, competition for the future is on the...
 
Apple Business Strategy
Apple Business StrategyApple Business Strategy
Apple Business Strategy
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
 
Productivity and Growth in CBO’s Forecasts
Productivity and Growth in CBO’s ForecastsProductivity and Growth in CBO’s Forecasts
Productivity and Growth in CBO’s Forecasts
 
Nigerian Budget 2010
Nigerian Budget 2010Nigerian Budget 2010
Nigerian Budget 2010
 
TECNOLOGIA.pdf
TECNOLOGIA.pdfTECNOLOGIA.pdf
TECNOLOGIA.pdf
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
 
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]4th Qtr Year End 2011 Economic  Review Feb 15 [Autosaved] [Autosaved]
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]
 
PSMJ's 2015 A/E/C Market Outlook
PSMJ's 2015 A/E/C Market OutlookPSMJ's 2015 A/E/C Market Outlook
PSMJ's 2015 A/E/C Market Outlook
 
Understanding And Applying Gdp And Productivity And The...
Understanding And Applying Gdp And Productivity And The...Understanding And Applying Gdp And Productivity And The...
Understanding And Applying Gdp And Productivity And The...
 
OECD-Wirtschaftsausblick Juni 2016
OECD-Wirtschaftsausblick Juni 2016OECD-Wirtschaftsausblick Juni 2016
OECD-Wirtschaftsausblick Juni 2016
 

Mehr von Congressional Budget Office

CBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCongressional Budget Office
 
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...Congressional Budget Office
 
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...Congressional Budget Office
 
The Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
The Budget and Economic Outlook for 2024 to 2034: Press Briefing SlidesThe Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
The Budget and Economic Outlook for 2024 to 2034: Press Briefing SlidesCongressional Budget Office
 
The Economic Outlook for 2024 to 2034 in 19 Slides
The Economic Outlook for 2024 to 2034 in 19 SlidesThe Economic Outlook for 2024 to 2034 in 19 Slides
The Economic Outlook for 2024 to 2034 in 19 SlidesCongressional Budget Office
 
Using Multiple Data Sources to Learn About the Race and Ethnicity of Taxpayers
Using Multiple Data Sources to Learn About the Race and Ethnicity of TaxpayersUsing Multiple Data Sources to Learn About the Race and Ethnicity of Taxpayers
Using Multiple Data Sources to Learn About the Race and Ethnicity of TaxpayersCongressional Budget Office
 
Perspectives on the Navy’s 2024 Shipbuilding Plan
Perspectives on the Navy’s 2024 Shipbuilding PlanPerspectives on the Navy’s 2024 Shipbuilding Plan
Perspectives on the Navy’s 2024 Shipbuilding PlanCongressional Budget Office
 
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher Costs
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher CostsThe 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher Costs
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher CostsCongressional Budget Office
 
Exploring the Effects of Medicaid During Childhood on the Economy and the Budget
Exploring the Effects of Medicaid During Childhood on the Economy and the BudgetExploring the Effects of Medicaid During Childhood on the Economy and the Budget
Exploring the Effects of Medicaid During Childhood on the Economy and the BudgetCongressional Budget Office
 
CBO’s Role and Most Recent Long-Term Budget Projections
CBO’s Role and Most Recent Long-Term Budget ProjectionsCBO’s Role and Most Recent Long-Term Budget Projections
CBO’s Role and Most Recent Long-Term Budget ProjectionsCongressional Budget Office
 
Approaches to Estimating the Noncyclical Rate of Unemployment
 Approaches to Estimating the Noncyclical Rate of Unemployment Approaches to Estimating the Noncyclical Rate of Unemployment
Approaches to Estimating the Noncyclical Rate of UnemploymentCongressional Budget Office
 
CBO’s Analysis of the Long-Term Budgetary Outlook
CBO’s Analysis of the Long-Term Budgetary OutlookCBO’s Analysis of the Long-Term Budgetary Outlook
CBO’s Analysis of the Long-Term Budgetary OutlookCongressional Budget Office
 
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...Congressional Budget Office
 
CBO’s Recent Appeals for New Research to Enhance Its Work for the Congress
CBO’s Recent Appeals for New Research to Enhance Its Work for the CongressCBO’s Recent Appeals for New Research to Enhance Its Work for the Congress
CBO’s Recent Appeals for New Research to Enhance Its Work for the CongressCongressional Budget Office
 
Trends in the Distribution of Household Income From 1979 to 2020
Trends in the Distribution of Household Income From 1979 to 2020Trends in the Distribution of Household Income From 1979 to 2020
Trends in the Distribution of Household Income From 1979 to 2020Congressional Budget Office
 
The Federal Budget Process and the Role of the Congressional Budget Office
The Federal Budget Process and the Role of the Congressional Budget OfficeThe Federal Budget Process and the Role of the Congressional Budget Office
The Federal Budget Process and the Role of the Congressional Budget OfficeCongressional Budget Office
 

Mehr von Congressional Budget Office (20)

CBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New Research
 
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...
The Federal Perspective on Coverage of Medications to Treat Obesity: Consider...
 
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...
CBO’s Approach to Estimating the Budgetary Effects of the No Surprises Act of...
 
The Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
The Budget and Economic Outlook for 2024 to 2034: Press Briefing SlidesThe Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
The Budget and Economic Outlook for 2024 to 2034: Press Briefing Slides
 
The Economic Outlook for 2024 to 2034 in 19 Slides
The Economic Outlook for 2024 to 2034 in 19 SlidesThe Economic Outlook for 2024 to 2034 in 19 Slides
The Economic Outlook for 2024 to 2034 in 19 Slides
 
Using Multiple Data Sources to Learn About the Race and Ethnicity of Taxpayers
Using Multiple Data Sources to Learn About the Race and Ethnicity of TaxpayersUsing Multiple Data Sources to Learn About the Race and Ethnicity of Taxpayers
Using Multiple Data Sources to Learn About the Race and Ethnicity of Taxpayers
 
Perspectives on the Navy’s 2024 Shipbuilding Plan
Perspectives on the Navy’s 2024 Shipbuilding PlanPerspectives on the Navy’s 2024 Shipbuilding Plan
Perspectives on the Navy’s 2024 Shipbuilding Plan
 
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher Costs
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher CostsThe 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher Costs
The 2024 Outlook for Navy Shipbuilding: Familiar Plans and Higher Costs
 
CBO’s Use of GitHub
CBO’s Use of GitHubCBO’s Use of GitHub
CBO’s Use of GitHub
 
Exploring the Effects of Medicaid During Childhood on the Economy and the Budget
Exploring the Effects of Medicaid During Childhood on the Economy and the BudgetExploring the Effects of Medicaid During Childhood on the Economy and the Budget
Exploring the Effects of Medicaid During Childhood on the Economy and the Budget
 
CBO’s Role and Most Recent Long-Term Budget Projections
CBO’s Role and Most Recent Long-Term Budget ProjectionsCBO’s Role and Most Recent Long-Term Budget Projections
CBO’s Role and Most Recent Long-Term Budget Projections
 
Atlas of Military Compensation
Atlas of Military CompensationAtlas of Military Compensation
Atlas of Military Compensation
 
Approaches to Estimating the Noncyclical Rate of Unemployment
 Approaches to Estimating the Noncyclical Rate of Unemployment Approaches to Estimating the Noncyclical Rate of Unemployment
Approaches to Estimating the Noncyclical Rate of Unemployment
 
CBO’s Analysis of the Long-Term Budgetary Outlook
CBO’s Analysis of the Long-Term Budgetary OutlookCBO’s Analysis of the Long-Term Budgetary Outlook
CBO’s Analysis of the Long-Term Budgetary Outlook
 
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...
Projecting the Effects of U.S. Federal Policies on Electric Vehicle Demand an...
 
CBO’s Recent Appeals for New Research to Enhance Its Work for the Congress
CBO’s Recent Appeals for New Research to Enhance Its Work for the CongressCBO’s Recent Appeals for New Research to Enhance Its Work for the Congress
CBO’s Recent Appeals for New Research to Enhance Its Work for the Congress
 
Trends in the Distribution of Household Income From 1979 to 2020
Trends in the Distribution of Household Income From 1979 to 2020Trends in the Distribution of Household Income From 1979 to 2020
Trends in the Distribution of Household Income From 1979 to 2020
 
The Federal Budget Process and the Role of the Congressional Budget Office
The Federal Budget Process and the Role of the Congressional Budget OfficeThe Federal Budget Process and the Role of the Congressional Budget Office
The Federal Budget Process and the Role of the Congressional Budget Office
 
Health Care and the Federal Budget
Health Care and the Federal Budget Health Care and the Federal Budget
Health Care and the Federal Budget
 
How CBO Projects Corporate Income Tax Revenues
How CBO Projects Corporate Income Tax RevenuesHow CBO Projects Corporate Income Tax Revenues
How CBO Projects Corporate Income Tax Revenues
 

Kürzlich hochgeladen

Water for Prosperity and peace - United Nations World Water Development Repo...
Water for Prosperity and peace -  United Nations World Water Development Repo...Water for Prosperity and peace -  United Nations World Water Development Repo...
Water for Prosperity and peace - United Nations World Water Development Repo...Christina Parmionova
 
War in Ukraine and problematics of the Ukrainian refugees in USA.
War in Ukraine and problematics of the Ukrainian refugees in USA.War in Ukraine and problematics of the Ukrainian refugees in USA.
War in Ukraine and problematics of the Ukrainian refugees in USA.ival6
 
2024: The FAR, Federal Acquisition Regulations - Part 18
2024: The FAR, Federal Acquisition Regulations - Part 182024: The FAR, Federal Acquisition Regulations - Part 18
2024: The FAR, Federal Acquisition Regulations - Part 18JSchaus & Associates
 
Item # 4 - Appointment of new PW Director
Item # 4 - Appointment of new PW DirectorItem # 4 - Appointment of new PW Director
Item # 4 - Appointment of new PW Directorahcitycouncil
 
PPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements PowerpointPPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements Powerpointahcitycouncil
 
War in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAWar in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAival6
 
My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54mmazurak
 
World Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportWorld Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportEnergy for One World
 
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECDregions
 
What Teenagers Have to Say about the Grandparents
What Teenagers Have to Say about the GrandparentsWhat Teenagers Have to Say about the Grandparents
What Teenagers Have to Say about the GrandparentsSERUDS INDIA
 
Sensitivity Training for 2023 BSKE.pptx
Sensitivity Training for  2023 BSKE.pptxSensitivity Training for  2023 BSKE.pptx
Sensitivity Training for 2023 BSKE.pptxAllidaacLuap
 
Item # 1a - March 18, 2024 Special CCM Minutes
Item # 1a - March 18, 2024 Special CCM MinutesItem # 1a - March 18, 2024 Special CCM Minutes
Item # 1a - March 18, 2024 Special CCM Minutesahcitycouncil
 
Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Christina Parmionova
 
2024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 172024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 17JSchaus & Associates
 
Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...ResolutionFoundation
 
2024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 162024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 16JSchaus & Associates
 
Cause of Awareness Programs in rural areas
Cause of Awareness Programs in rural areasCause of Awareness Programs in rural areas
Cause of Awareness Programs in rural areasSERUDS INDIA
 
Children who live with Grandparents are really lucky
Children who live with Grandparents are really luckyChildren who live with Grandparents are really lucky
Children who live with Grandparents are really luckySERUDS INDIA
 
Civics Presentation - Salvador Galvan.pptx
Civics Presentation - Salvador Galvan.pptxCivics Presentation - Salvador Galvan.pptx
Civics Presentation - Salvador Galvan.pptxsgalvan1
 

Kürzlich hochgeladen (20)

Water for Prosperity and peace - United Nations World Water Development Repo...
Water for Prosperity and peace -  United Nations World Water Development Repo...Water for Prosperity and peace -  United Nations World Water Development Repo...
Water for Prosperity and peace - United Nations World Water Development Repo...
 
War in Ukraine and problematics of the Ukrainian refugees in USA.
War in Ukraine and problematics of the Ukrainian refugees in USA.War in Ukraine and problematics of the Ukrainian refugees in USA.
War in Ukraine and problematics of the Ukrainian refugees in USA.
 
How to Save a Place: Become an Advocate.
How to Save a Place: Become an Advocate.How to Save a Place: Become an Advocate.
How to Save a Place: Become an Advocate.
 
2024: The FAR, Federal Acquisition Regulations - Part 18
2024: The FAR, Federal Acquisition Regulations - Part 182024: The FAR, Federal Acquisition Regulations - Part 18
2024: The FAR, Federal Acquisition Regulations - Part 18
 
Item # 4 - Appointment of new PW Director
Item # 4 - Appointment of new PW DirectorItem # 4 - Appointment of new PW Director
Item # 4 - Appointment of new PW Director
 
PPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements PowerpointPPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements Powerpoint
 
War in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAWar in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USA
 
My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54
 
World Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportWorld Happiness Report 2024- Full Report
World Happiness Report 2024- Full Report
 
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
 
What Teenagers Have to Say about the Grandparents
What Teenagers Have to Say about the GrandparentsWhat Teenagers Have to Say about the Grandparents
What Teenagers Have to Say about the Grandparents
 
Sensitivity Training for 2023 BSKE.pptx
Sensitivity Training for  2023 BSKE.pptxSensitivity Training for  2023 BSKE.pptx
Sensitivity Training for 2023 BSKE.pptx
 
Item # 1a - March 18, 2024 Special CCM Minutes
Item # 1a - March 18, 2024 Special CCM MinutesItem # 1a - March 18, 2024 Special CCM Minutes
Item # 1a - March 18, 2024 Special CCM Minutes
 
Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.
 
2024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 172024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 17
 
Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...
 
2024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 162024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 16
 
Cause of Awareness Programs in rural areas
Cause of Awareness Programs in rural areasCause of Awareness Programs in rural areas
Cause of Awareness Programs in rural areas
 
Children who live with Grandparents are really lucky
Children who live with Grandparents are really luckyChildren who live with Grandparents are really lucky
Children who live with Grandparents are really lucky
 
Civics Presentation - Salvador Galvan.pptx
Civics Presentation - Salvador Galvan.pptxCivics Presentation - Salvador Galvan.pptx
Civics Presentation - Salvador Galvan.pptx
 

CBO’s Economic Forecast: Understanding the Slowdown of Productivity Growth

  • 1. Congressional Budget OfficeCongressional Budget Office NABE Foundation 17th Annual Economic Measurement Seminar September 1, 2020 Robert Shackleton Macroeconomic Analysis Division CBO’s Economic Forecast: Understanding the Slowdown of Productivity Growth
  • 2. 1 CBO The forecast is used primarily as an input to CBO’s 10-year federal budget projections and analyses of legislative proposals. It is a current-law forecast:  It incorporates the assumption that legislation will not change but that changes in policy built into current legislation will occur.  For example, current tax law provides for the expiration of certain provisions within the next 10 years.  CBO’s current forecast projects economic responses to the expiration of those provisions. The Purpose of CBO’s Economic Forecast
  • 3. 2 CBO CBO’s approach involves projections of:  Potential (maximum sustainable) output in a neoclassical growth framework and  Actual output in a standard macroeconometric model. The estimate of potential output is mainly based on estimates of:  The potential labor force,  The flow of services from the capital stock, and  Potential total factor productivity in the nonfarm business sector. CBO’s Approach to Forecasting
  • 4. 3 CBO GDP = gross domestic product. Real values are nominal values that have been adjusted to remove the effects of changes in prices. Average Annual Growth of Real Potential GDP
  • 5. 4 CBO GDP = gross domestic product. Historical Periods Projection 1950– 2019 1950– 1973 1974– 1981 1982– 1990 1991– 2001 2002– 2007 2008– 2019 2020– 2030 Overall Economy Potential Output 3.2 4.0 3.1 3.4 3.2 2.6 1.6 1.8 Potential Labor Force 1.4 1.6 2.5 1.6 1.2 1.0 0.5 0.4 Potential Labor Productivity 1.7 2.4 0.6 1.7 2.0 1.6 1.1 1.4 Nonfarm Business Sector Potential Output 3.4 4.1 3.5 3.6 3.6 2.9 1.8 2.1 Potential hours 1.3 1.4 2.3 1.8 1.2 0.4 0.5 0.4 Capital services 3.4 3.8 3.8 3.6 3.9 2.9 2.4 2.1 Potential total factor productivity 1.4 1.9 0.7 1.3 1.5 1.7 0.7 1.1 Potential Labor Productivity 2.1 2.7 1.2 1.8 2.4 2.5 1.3 1.7 Key Estimates in CBO’s Projection of Potential GDP, July 2020 Average Annual Percentage Growth, by Calendar Year
  • 6. 5 CBO Vertical bars indicate the duration of recessions. Total Factor Productivity in Nonfarm Business Since 2000
  • 7. 6 CBO The slowdown began around 2005, before the financial crisis and the recession. It is widespread among industries and international in scope. Five areas of inquiry might shed light on the slowdown:  Measurement issues  Growth feedbacks  Demographic effects  Structural issues  A slowdown in basic innovation Why Has the Growth of Total Factor Productivity Slowed?
  • 8. 7 CBO Mismeasurement of real (inflation-adjusted) inputs and outputs is persistent. However, measurement issues can account for only a small portion of the slowdown of total factor productivity growth:  Mismeasurement does not appear to be worse than it was in the past.  Products no longer measured in output have relatively modest value to consumers compared with “missing” growth in total factor productivity. An example is digital photographs, which have largely replaced printed ones and do not show up in GDP.  Measurement errors related to international supply chains are thought to explain less than 0.1 percentage point of the slowdown of growth of estimated total factor productivity per year. The Slowdown of Growth of Total Factor Productivity: Measurement Issues
  • 9. 8 CBO Growth of the labor supply has slowed dramatically. Aggregate demand recovered slowly in the aftermath of the recession. Both developments have led to relatively modest demand for capital investment. The net result is slower turnover of the capital stock and slower introduction of new technologies. However, there is little evidence of a backlog of technology. The Slowdown of Growth of Total Factor Productivity: Growth Feedbacks
  • 10. 9 CBO Highly skilled and well-educated baby boomers are retiring, lowering the aggregate level of human capital. However, skilled and experienced workers tend to stay in the labor force longer, pushing up the average skill level. Educational attainment has grown more slowly than in previous generations because it is already at a high level. However, educational attainment among younger cohorts has continued to improve, especially during the recession and its slow recovery. The Slowdown of Growth of Total Factor Productivity: Demographic Effects
  • 11. 10 CBO There is declining dynamism in the economy:  Top firms in many industries continue to have strong productivity growth, but other firms increasingly lag behind.  Rates of firms’ entry and exit have declined.  The share of employment and output accounted for by young firms (historically a source of productivity growth) has fallen. But there is no consensus on the causes:  Are barriers to entry getting higher?  Are product markets becoming less contestable? Restrictive land-use regulations increasingly raise housing costs and discourage workers from migrating to denser urban areas, where most growth in productivity occurs. The Slowdown of Growth of Total Factor Productivity: Structural Issues
  • 12. 11 CBO The pessimistic view:  Innovation from the late nineteenth century through the early 1970s was unique and unsustainable.  Acceleration in total factor productivity during the 1990s and 2000s was a temporary deviation related to information technology.  We are “running out of ideas”: Research costs are rising, and new ideas are not as economically significant. The optimistic view:  The pool of potential innovators and the potential market for products are now global.  Research tools are greatly improved.  Communication of innovations is much more rapid.  Major advances in technology can be expected—but because they diffuse slowly, their economic impact will take time. The Slowdown of Growth of Total Factor Productivity: A Slowdown in Basic Innovation
  • 13. 12 CBO Congressional Budget Office, An Update to the Economic Outlook: 2020 to 2030 (July 2020), www.cbo.gov/publication/56442. Robert Shackleton, Estimating and Projecting Potential Output Using CBO’s Forecasting Growth Model, Working Paper 2018-03 (Congressional Budget Office, February 2018), www.cbo.gov/publication/53558. Additional Information