The Upcoming Slowdown in U.S. Economic Growth

At least since 1950, the United States has been stimulated by increases in educational attainment, increases in research intensity, and the increased openness and development of the world economy. Such changes suggest, contrary to the conventional view, that the U.S. economy is far from its steady state balanced growth path. The theoretical framework analyzed here provides a coherent interpretation of this evidence and indicates that when these increases cease and the U.S. economy reaches its steady state, U.S. per capita growth can be expected to fall to a rate of approximately 1/4 its post-war average.