Will America Get Old Before It Becomes Great Again?

This is the second in a series of the opportunities and threats to productivity. This week, I focus on the effects of labour supply on productivity, (see AI Productivity and the Promised Land). I am grateful for the aid and guidance from New Deal democrat for his help in data sourcing and analysis in the preparation of this report.

The Bank of Japan Governor Kazuo Ueda at Jackson Hole gave a sobering presentation on the macroeconomic effects of Japan’s aging population. In light of the President’s abrupt pivot on immigration policy, Japan’s path could foreshadow what happens to U.S. productivity in the coming years.
 

The accompanying chart shows the evolution of Japan and U.S. total factor productivity shown on a log scale since 1954. Since the peak of Japan’s bubble in 1990, Japanese productivity (blue line) has been flat. By contrast, U.S. factor productivity (red line) rose steadily during that period.

Much of the productivity headwinds can be attributable to age demographics.

 

The full post can be found here.

 

 

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