Dollars and Jens
Thursday, February 12, 2004
Economic Report of the President
At the Marginal Revolution, Alex Tabarrok mentions the ERP, and Brad DeLong's reaction to the optimistic employment forecast (he's agin' it). One of the arguments is that 1.7% is too pessimistic an estimate for productivity growth, and I have to say I generally agree, but 1) I don't think the past 5-years average of 3.7% is sustainable for decades at a time, 2) we are no longer right at the very beginning of the recovery, and 3) inventories are as low as they've been in at least 50 years (relative to sales). The way productivity is measured, increasing inventories will be a substantial drag, won't they?

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