assistance and job training, and to the fact that the __ It is also the most important issue in terms of its US has a high rate of incarceration that especially impact on future trend growth in the US, which in affects lower-skilled men.” According to the turn has the greatest impact on the long-term rate report, several policy measures can boost prime- of earnings growth and equity market returns. age male labor force participation, including As reviewed in last year’s Outlook, the techno- optimists and the techno-pessimists are on opposite ¢ Increased investment in infrastructure sides of the debate on declining productivity ¢ Systemic reforms in the criminal justice system | growth. Both camps have garnered new members; and in immigration policies even Federal Reserve Chair Janet Yellen and ¢ Tax reforms Vice Chair Stanley Fischer have joined the fray.” ¢ Investment in education and training Most recently, in September 2016, the Brookings Institution hosted a conference with leading This demographic aspect of secular stagnation is experts from both camps to debate the issue. undeniable. In fact, an October 2016 paper by a We should note that debates on productivity team at the Federal Reserve Board, “Understanding are nothing new. They have surfaced during past the New Normal: The Role of Demographics,””° periods of slow growth, as was the case in the early shows that the slow pace of economic growth since 1990s. Even some of the players are the same: 1980 and the more pronounced decline in the last |= Robert Gordon was a techno-pessimist in the early decade could be predicted by a model looking 1990s and remains so in the 2010s.4 at “fertility, labor supply, life expectancy, family Part of the productivity debate is philosophical. composition, and international migration.” For example, one question pertains to the increased Thus, a glass half-full or half-empty perspective use of free digital services such as Facebook, does not change the facts on the ground. Th