CBO’s Economic Forecast: Understanding the Slowdown of Productivity Growth
Presentation
Presentation by Robert Shackleton, an analyst in CBO’s Macroeconomic Analysis Division, at the NABE Foundation 17th Annual Economic Measurement Seminar.
CBO regularly publishes economic projections that are consistent with current law—providing a basis for its estimates of federal revenues, outlays, deficits, and debt. A key element in CBO’s projections is its forecast of potential (maximum sustainable) output, which is based mainly on estimates of the potential labor force, the flow of services from the capital stock, and potential total factor productivity in the nonfarm business sector. This presentation describes CBO’s most recent 10-year projections of potential output, highlighting the importance of potential total factor productivity. It also discusses the historic slowdown of growth in total factor productivity and explores possible explanations for the slowdown as well as implications for the future.
