Prouductivity in Usa
Prouductivity in Usa
John sits at home each night with his wife and two children and watches the news. He listens as experts on the economy tell him that the economy is growing and that the GDP is growing. He wonders how this can be, because he lost his job months ago and has not been able to find work since. Has the very country that John lives in moved on and left him behind? This is the question that many Americans are asking themselves, and many more will be soon. In the 1960s and early 90s productivity in America increased by record amounts. The nation was flourished, people had jobs, and they were spending their money. All of this was done by simple government intervention. Now America is looking at another rise in productivity, but this time it may be a little bit different unless the government takes the proper steps.
Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity they are also called factors of production. There are four major determinants of productivity of any country’s economy.
It was said that once-in-a-century advances in technology are transforming our economy. The computer chip is doing for todays knowledge economy what electricity did for our industrial economy a century ago. Synergies in technology are driving acceleration in productivity growth that enables us to grow faster with less inflation. Economic progress is speeding up; the speed limit is rising.
“Real GDP growth has averaged 4 percent for the past four years, with declining inflation. This almost doubles the 2 percent to 2.5 percent not long ago considered the maximum no inflationary potential. But weve been growing faster than potential and sustaining the unsustainable for four years and counting. Sounds odd, doesnt it? Our faster output growth is based primarily on faster productivity growth and secondarily