Why Is Productivity Growth Important?
Because it is the basis for all economic growth. In a very real sense it is the basis for civilization. A big difference between us and animals is our ability to improve our productivity. That comes from our ability to learn and to learn more than other animals. Productivity is not just the basis for greater wealth, but also greater artistic and Intellectual achievement. It is also the basis for more recreation and fun in life. And it is the basis for a longer and healthier life. In short, it is the basis for life as we know it.
Hence, understanding how productivity grows is absolutely essential to understanding why our economy grows and how our society changes. It’s essential to understanding your own personal everyday life—even your love life. Finally, when we enter more difficult economic times, it will be critical to understanding how to move our economy, and the worlds’ economy, forward. A lack of focus in the economic profession on our slowing productivity growth is one of its great mistakes. This is partly because, without an understanding of what creates productivity growth, it is hard to study it very productively. And, understanding what creates productivity growth requires a new economic theory, as mentioned …….
Northwestern University. Hats off to Dr. Robert Gordon for focusing on the issue, but the issue stops quickly because Mr. Gordon cannot see an easy answer to increasing productivity growth. He essentially assumes we are doomed to low productivity growth and low economic growth for some time.
Again, the lack of a theory of productivity growth is a big problem. We are certainly not doomed to low or no productivity growth. Quite the contrary as this website attests. There are a myriad of ways to improve productivity, but none of them are easy. … need an ending … And, understanding productivity growth will be a revolution for the economic profession.
Also, you can get a good overview of the problems with current productivity growth theory, how the thinking evolved to where it is today and where it needs to go in the future, by downloading the excerpt from our book Aftershock Third Edition titled "The Trouble Behind the Bubbles" by clicking the link below.