A \\"New Normal\\"? The Prospects for Long-Term Growth in the United States

Aaron Steelman, director of publications, and John A. Weinberg, senior vice president and special advisor to the president, examine the claim that the U.S. economy has reached a \\"new normal\\" of roughly 2 percent annual growth. This has been the average growth rate since the end of the Great Recession, considerably lower than the post-World War II average. Proponents of the new normal hypothesis argue, among other things, that innovation has slowed and is unlikely to improve. They also believe that demographic trends pose serious problems for U.S. fiscal policy and will exert a drag on the economy. Steelman and Weinberg concede that such issues are significant, but they argue that the prospects for innovations that improve standards of living are stronger than skeptics maintain. They also suggest there are policy areas that, if addressed thoughtfully, likely could yield improvements in economic performance.