Tax, trade and other policy proposals are targeted to fuel GDP increases of 3.5% or more, but many doubt long-term view
Perhaps most important, demographic trends have produced slower growth in the working population. And the U.S. and other advanced economies are grappling with sluggish gains in productivity, for reasons that aren’t wholly clear.
.. With the right package of policy changes “you can have a measurable impact on GDP growth,” said Douglas Holtz-Eakin, president of the conservative American Action Forum think tank and a former CBO director. “Can you get a full percentage point? That’s a lot.”
.. Deceleration in labor-force growth as the baby-boom generation
begins to retire and workforce participation declines, plus a
marked slowdown in productivity gains since the IT-fueled boom of the late 1990s and early 2000s
.. Growth of 4% or even 5% a year is achievable “when we get the policies right,” said Stephen Moore, a conservative economist and economic adviser to Mr. Trump. He said tax and regulatory reforms and increased energy production can bolster business investment and draw workers back into the labor force.
“There’s so much low-hanging fruit out there,” he said.
.. But Michael Feroli, the bank’s chief U.S. economist, said he would be “very surprised” if trend growth approached Mr. Trump’s target.While there’s some scope for policy changes to boost long-run growth, “I think we’re talking in the range of a few tenths of a percent,” Mr. Feroli said.