The opening lines of a relatively long discussion from Robin Harding at the FT of "the productivity puzzle":
US economy: The productivity puzzle, by Robin Harding: To glimpse the miracle of productivity growth there is nowhere better to look than the ... US Corn Belt. A hundred years ago, an army of farmers toiled to produce 30 bushels an acre; now only a few hands are needed to produce 160 bushels from the same land.
The rise of modern civilisation rested on this trend: for each person to produce ever more. For the past 120 years, as if bound by some inexorable law, output per head of population increased by about 2 per cent a year. That is, until now.
There is a fear – voiced by credible economists such as Robert Gordon... – that 2 per cent is no law but a wave that has already run its course. According to Prof Gordon’s analysis, 2 per cent could easily become 1 per cent or even less, for the next 120 years. ...
Yet there are also techno-optimists, such as Erik Brynjolfsson and Andrew McAfee..., whose faith in new discoveries is such that they expect growth to accelerate, not decline.
Then there are more phlegmatic economists, whose answers are less exciting but also less speculative – and come in a bit below 2 per cent for growth in output per head.
The productivity question is of the greatest possible consequence for the US economy...