Great productivity debate: the answer is energy
In this interview, Dr. Jorgenson views the rapid US economic growth from 1948 to 1976 as due largely to expanded capital input, followed by growth in productivity and labor inputs. The decline since 1973 is almost entirely due to the drop in productivity. When the data are disaggregated to the level of 35 individual industrial and government sectors to determine gross intermediate outputs, the model is able to determine how the relative prices of sectoral inputs affect the growth of sectoral productivity. A tax package which cuts both payroll and capital taxes will stimulate capital formation and productivity growth. The concept of a First Year Capital Recovery System (FYCRS) insulates capital-consumption allowances from inflation and allows tax rates to reflect present value as well as reducing business paperwork. This approach would also spur technological innovation and improve the US position in international competition using trade adjustment and unemployment assistance in a way that won't prolong the life of noncompetitive industries. Specific measures that can redirect research and training need to link the scientific and business sectors in the planning process. (DCK)
- OSTI ID:
- 6701831
- Journal Information:
- Challenge; (United States), Vol. 23:5
- Country of Publication:
- United States
- Language:
- English
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