Which Economic Future For US Income Growth Do You LIke?

The Financial Times describes three views of long term income growth in the US.  One view, from a prominent economist, is pessimistic; another view from an economist at Goldman Sachs is less pessimistic, and the author of the article takes an optimistic position.  You can examine the scorecard which leads to the different conclusions about the future.  Each of the factors that affect income growth are provided with a score which shows how each might affect a divergence from the long term trend of 2% growth.  The major differences between the pessimistic and optimistic outlook are twofold:  The pessimistic view assumes that information technology will not have a major impact on productivity.  The optimist argues that we are just beginning to see the impact of IT on productivity and that the future looks bright.  The pessimist believes that lower rate of income growth in the US has been underway for the last 40 years but it was disguised by asset booms.  The optimist believes that the output gap due to the Great Recession will be reversed, and that rapid growth will ensue as the output gap is closed.

It is less important to determine which view is correct, than it is to evaluate the factors that determine growth on the provided scorecard.   Each of these factors can make a contribution to income growth.  Some factors that might influence growth are not on the scorecard.  For example, there is no consideration of the cost and availability of energy;  the likely effects of climate change are not considered, and there is no consideration of political shocks to the global economy.