Is the new normal for US growth going to be just 2%
Is the new normal for US growth going to be just 2%? A recent report from Morgan Stanley's chief economist suggests normal GDP growth is going to be 2% moving forward. That's a significant half a percent lower than what we're used to expecting in the US. The report mentions a decline in population growth and labor participation, as well as a slower increase in productivity as the main causes for lower growth expectations. While I understand the reasoning behind this assessment, I can't say I agree. First off, a decline in population growth should eventually lead to higher labor participation. Meanwhile, the biggest impact on productivity comes from technology. There are plenty of technological advancements underway which have the potential to be disruptive - as well as improve productivity. Bottom line, I see slower growth as only a short-term situation.
I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...
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