The Formula For Economic Growth

Published: June 27, 2017

Economic growth increases when more people work more productively. However, economic growth has slowed in the last decade, as increases in productivity and hours worked have fallen to fractions of their previous rates. Returning to rapid economic growth will require policies that encourage individuals to rejoin the workforce and businesses to invest in physical capital.

Discussion Questions

1. How can we encourage productivity among workers?
2. What are some examples of technology that have improved productivity among workers?
3. Why might some people choose not to participate in the labor force?

Additional Resources

• John Taylor argues for policy reforms to promote economic growth in “Can We Restart The Recovery All Over Again?”
• In “Slow economic growth as a phase in a policy performance cycle,” John Taylor discusses the reasons and policies behind our poor economic performance
• Read “A Recovery Waiting to Be Liberated” by John Taylor to learn about the policies that can speed up our economic growth
• Watch John Taylor’s testimony before the Financial Services Committee concerning monetary policy
• In an interview with Bloomberg's Kathleen Hays, John Taylor discusses the global financial instability and roles the central banks play
• Read “Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis” by John B. Taylor to learn more about the 2007-2008 financial crisis