Wednesday, November 2, 2016
Growth and Productivity. Simple Math
The clueless (e.g. the media and politicians) keep asking why economic growth has remained slow. The answer is simple mathematics (which might explain their inability to understand it). More and more resources are being shifted away from sectors with high productivity into sectors with low productivity (e.g. government, education, and healthcare). These low productivity sectors are all ones that government subsidizes, so it should not be a surprise. Neither should the resulting slow growth be a surprise.
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