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Unformatted text preview: growth. Productivity is measured as economic output per hour of labor. Historically, population growth has been averaging 1.0% and growth in productivity has averaged 1.5% per year. The sum of these two measurers provides the “sustainable” growth rate for the economy. But, during the 90’s computer technology had become more integrated into the economy and has enhanced productivity growth. For the 90’s productivity growth averaged well above the 1 5% historical benchmark and has allo ed the econom to gro at faster rates 4 1.5% historical benchmark and has allowed the economy to grow at faster rates without major trouble from inflation. So, many economists believed that the economy during the 90’s could have grown faster than the previously believed 2.5% without inflation worries. But, the question is, how long will the economy enjoy these larger than historically normal increases in annual productivity?...
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.
- Fall '10