Notice that the precipitous decline in real GDP per capita started in 2005: the start of the postnormal, once again.
N. Gregory Mankiw, One Economic Sickness, Five Diagnoses
There is no simple way to gauge an economy’s health. But if you had to choose just one statistic, it would be gross domestic product. Real G.D.P. measures the total income produced within an economy, adjusted for the overall level of prices.
Here is the sad fact: Over the last decade, the growth rate of real G.D.P. per person has averaged just 0.44 percent per year, compared with the historical norm of 2.0 percent. At a rate of 2.0 percent, incomes double every 35 years. At a rate of 0.44 percent, it takes about 160 years to double.
He offers five possible explanations: 1/ a statistical mirage (measuring the wrong things or the right things wrong), 2/ hangover from the 08-09 crisis, 3/ secular stagnation (a la Larry Summers), 4/ slowing innovation (a la Robert Gordon), 5/ policy missteps (by Obama and others).
Mankiw says “I have no idea which one is right. The truth may well involve a bit of each.’
We have everything wrong with us.
from Stowe Boyd http://www.stoweboyd.com/post/146171960137
