has made thus far to reduce the U.S. unemployment rate can be doubly
recommended because they have the potential to improve U.S. productivity growth.
Before concluding this chapter, it is worth noting that some economists already see evidence that increasing productivity growth in the late 1980s and early 1990s has reduced the U.S. NAIRU. Robert Gordon, for
one, has recently suggested that increasing productivity has helped
reduce the NAIRU from 6 to 5.5 percent. Many businesspeople support
this viewpoint. Other economists are not yet ready to say that productivity growth has increased enough to reduce the NAIRU significantly.
Whether increasing productivity has or has not already reduced the
NAIRU, we can be optimistic that if productivity growth continues to
increase the NAIRU will come down.
John W Kendrick and
Elliot S. Grossman, Productivity: The United States'
Trends and Cycles ( Baltimore: Johns Hopkins University Press, 1980); Edward E Denison
, "Explanations of Declining Productivity Growth," Survey of Current
Business, August 1979, pp. 1-24.
Michael Bruno and
Jeffrey D. Sachs, Economics of Worldwide Stagflation
( Cambridge: Harvard University Press, 1985), p. 249.
George E. Johnson and
Richard Layard, "The Natural Rate of
Unemployment: Explanation and Policy," in
O. Ashenfelter and
(eds.), Handbook of Labor Economics, Volume 2 ( New York: Elsevier Science, 1986), Chapter 16.
Richard Layard, How to Beat Unemployment ( Oxford, England: Oxford
University Press, 1986).
Sachs, Economics of Worldwide Stagflation.
Amanda Bennett, "Business and Academia Clash over a Concept: 'Natural'
Jobless Rate," Wall Street Journal, January 24, 1995, p. 1.
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Reducing Unemployment:A Case for Government Deregulation.
Contributors: Garry K. Ottosen - Author, Douglas N. Thompson - Author.
Publisher: Praeger Publishers.
Place of publication: Westport, CT.
Publication year: 1996.
Page number: 143.
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