IDEAS home Printed from https://ideas.repec.org/a/fip/fedbne/y1991ijanp3-14.html
   My bibliography  Save this article

How fast can we grow?

Author

Listed:
  • Stephen K. McNees

Abstract

Nearly thirty years ago, Arthur Okun posed the question, \"How much output can the economy produce under conditions of full employment?\" He offered a \"simple and direct\" answer that now, with the benefit of hindsight, seems outmoded and inadequate. This article argues that a minor modification of Okuns procedure based on demographics can adequately account for changes in the potential growth rate over the last 35 years and provide an idea of what to expect in the next ten years. Specifically, it is suggested that changes in the composition and rate of growth of the working-age population can account for the low rate of growth of potential GNP in the 1980s as well as suggest that it will revert to a more typical 2.5 to 2.75 percent by the late 1990s.

Suggested Citation

  • Stephen K. McNees, 1991. "How fast can we grow?," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-14.
    • Handle: RePEc:fip:fedbne:y:1991:i:jan:p:3-14
    as

    Download full text from publisher

    File URL: http://www.bostonfed.org/economic/neer/neer1991/neer191a.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    3. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, April.
    4. repec:fth:harver:1490 is not listed on IDEAS
    5. Robin L. Lumsdaine & David A. Wise, 1994. "Aging and Labor Force Participation: A Review of Trends and Explanations," NBER Chapters, in: Aging in the United States and Japan: Economic Trends, pages 7-42, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard W. Kopcke, 1992. "Profits and stock prices: the importance of being earnest," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 26-44.
    2. Neil H. Buchanan, 1998. "Comparing Alternative Methods of Adjusting U.S. Federal Fiscal Deficits for Cyclical and Price Effects," Macroeconomics 9805025, University Library of Munich, Germany.
    3. Nelissen, J.H.M. & Vossen, A.P.J.G., 1993. "The impact of population growth on the standard of living : Demo-economic scenarios for The Netherlands," Other publications TiSEM 74b5b019-e39f-4431-a17e-5, Tilburg University, School of Economics and Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robalino, David A. & Zylberstajn, Eduardo & Zylberstajn, Helio & Afonso, Luis Eduardo, 2009. "Ex-ante methods to assess the impact of social insurance policies on labor supply with an application to Brazil," Social Protection Discussion Papers and Notes 52448, The World Bank.
    2. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    3. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324, Elsevier.
    4. Sebnem Kalemli-Ozcan & David Weil, 2010. "Mortality change, the uncertainty effect, and retirement," Journal of Economic Growth, Springer, vol. 15(1), pages 65-91, March.
    5. Barbara Berkel & Axel Börsch‐Supan & Alexander Ludwig & Joachim Winter, 2004. "Sind die Probleme der Bevölkerungsalterung durch eine höhere Geburtenrate lösbar?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(1), pages 71-90, February.
    6. Bell, William Paul, 2005. "An evaluation of policies to reduce fiscal pressure induced by population ageing in Australia," MPRA Paper 38286, University Library of Munich, Germany.
    7. repec:eee:labchp:v:3:y:1999:i:pc:p:3261-3307 is not listed on IDEAS
    8. Irmen, Andreas, 2009. "Population Aging and the Direction of Technical Change," Working Papers 0493, University of Heidelberg, Department of Economics.
    9. Robalino, David A. & Zylberstajn, Eduardo & Zylberstajn, Helio & Afonso, Luis Eduardo, 2008. "An ex-ante evaluation of the impact of social insurance policies on labor supply in Brazil : the case for explicit over implicit redistribution," Social Protection Discussion Papers and Notes 90342, The World Bank.
    10. Fougere, Maxime & Merette, Marcel, 1999. "Population ageing and economic growth in seven OECD countries," Economic Modelling, Elsevier, vol. 16(3), pages 411-427, August.
    11. Alan L. Gustman & F. Thomas Juster, 1995. "Income and Wealth of Older American Households: Modeling Issues for Public Policy Analysis," NBER Working Papers 4996, National Bureau of Economic Research, Inc.
    12. Yu Liu & Mingde Jia, 2023. "The Impact of Population Aging on Green Innovation: An Empirical Analysis Based on Inter-Provincial Data in China," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    13. Peter Diamond & Jonathan Gruber, 1999. "Social Security and Retirement in the United States," NBER Chapters, in: Social Security and Retirement around the World, pages 437-473, National Bureau of Economic Research, Inc.
    14. Rao, B. Bhaskara, 2010. "Estimates of the steady state growth rates for selected Asian countries with an extended Solow model," Economic Modelling, Elsevier, vol. 27(1), pages 46-53, January.
    15. Beatrix Paal & Bruce D. Smith, 2013. "The sub-optimality of the Friedman rule and the optimum quantity of money," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 911-948, November.
    16. Jung-Suk Yu & M. Kabir Hassan & Abdullah Mamun & Abul Hassan, 2014. "Financial Sectors Reform and Economic Growth in Morocco: An Empirical Analysis," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 13(1), pages 69-102, April.
    17. Prof. Dr. Adem KALCA & Resc. Assist. Atakan DURMAZ, 2012. "Diaspora As The Instrument Of Humane Capital," International Journal of Business and Social Research, LAR Center Press, vol. 2(5), pages 94-104, October.
    18. repec:zbw:rwidps:0030 is not listed on IDEAS
    19. Ghirmai Kefela & Ravinder Rena, 2008. "Human Capital Investment Is a Continuous Proposition: A Study of North East African States," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 2(1), pages 50-65, June.
    20. Patxot, Concepció & Rentería, Elisenda & Souto, Guadalupe, 2015. "Can we keep the pre-crisis living standards? An analysis based on NTA profiles in Spain," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 54-62.
    21. Raouf Boucekkine & Fernando Del Río & Omar Licandro, 2003. "Embodied Technological Change, Learning‐by‐doing and the Productivity Slowdown," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 87-98, March.
    22. Abida Hafeez & Karim Bux Shah Syed & Fiza Qureshi, 2019. "Exploring the Relationship between Government R & D Expenditures and Economic Growth in a Global Perspective: A PMG Estimation Approach," International Business Research, Canadian Center of Science and Education, vol. 12(4), pages 163-174, April.

    More about this item

    Keywords

    Productivity; Labor supply;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1991:i:jan:p:3-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Spozio (email available below). General contact details of provider: https://edirc.repec.org/data/frbbous.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.