Working Papers

2016-18 | August 2016


Reassessing Longer-Run U.S. Growth: How Low?


What is the sustainable pace of GDP growth in the United States? A plausible point forecast is that GDP per capita will rise well under 1 percent per year in the longer run, with overall GDP growth of a little over 1-1/2 percent. The main drivers of slow growth are educational attainment and demographics. First, rising educational attainment will add less to productivity growth than it did historically. Second, because of the aging (and retirements) of baby boomers, employment will rise more slowly than population (which, in turn, is projected to rise slowly relative to history). This modest growth forecast assumes that productivity growth is relatively “normal,” if modest—in line with its pace for most of the period since 1973. An upside risk is that we see another burst of information-technology-induced productivity growth similar to what we saw from 1995 to 2004.

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Article Citation

Fernald, John G. 2016. "Reassessing Longer-Run U.S. Growth: How Low?," Federal Reserve Bank of San Francisco Working Paper 2016-18. Available at