Brocker.Org: How much can the US economy grow? – BBH


Analysts at Brown Brothers Harriman explained that there was much debate in the primaries a year ago about how fast the US economy can grow.

Key Quotes:

“Trump has talked about 5% and sometimes 4%.The budget presented assumes 3% growth.”

“The Federal Reserve estimates that trend growth in the US is a little below 2.0%.”    

“Obama was the first President since the end of WWII that did not record a single year of growth above 3.0%.”

“The last year that such growth was reported was 2005, and the last four-quarter period that averaged at least 3% was mid-2006.”  

“Fed Chair Yellen recognizes that some supply-side reforms can boost growth potential. However, in the long run, growth is a function of hours worked and productivity.  Slower growth of the pool of available workers and weak productivity growth limits the growth potential of the economy. There appears to be little thought given to boosting productivity, though the right kind of infrastructure investment can help.”