America’s productivity growth has slowed. Does it matter?
This should be a three to five page paper, submitted according to the stated deadlines. Be sure to address each point listed and any others you feel will add to the detail of this paper. This assignment is due by midnight EST the night before class.
Productivity growth has two components:
A long-term trend set by the quality of the workforce, the pace of capital investment and the speed of innovation.
More volatile short-term fluctuations driven by the business cycle.
Early in an expansion, for instance, productivity takes off temporarily as firms squeeze their existing staff harder before hiring new workers. As an economy slows, it tails off, because firms are slow to sack workers immediately.
Explain what is at work now. Use specific markets to defend your position. What parts of the economy are effected, and how? Does it matter and why or why not?