This article, by Alice Rivlin, begins by delineating the questions around the sudden growth in the economy due to technological change. She describes that it was unexpected, yet one of the causal factors was based on the idea that computers and information technology could be a solution to unskilled laborers in the midst of a tight labor market. Furthermore, Revlin goes into detail about the role of fiscal policy employed by Clinton and Bush, and the monetary policy (or lack thereof) on the Fed’s part. Revlin states that “The Fed's more significant contribution, however, was doing nothing, or almost nothing, in 1996 and 1997” but that had the predictions and models been right about growing inflation rates and a tighter labor market, the Fed would have been seen as reckless.
Revlin explains that while policy is important, it is the policies that “set the scene” that tend to have the most impact, such as supporting research and improving our labor force with skilled workers. “Hence, the most important rule for economic policymakers is the same as for the medical profession: first, do no harm.” With this goal in place, we must realize that “The biggest challenge of affluence, is to make the economy more inclusive, to open up the opportunities, substantially and visibly, to those that are not now able to participate, and to do that in ways that will enhance, not destroy, the productivity growth that makes the affluence possible.” Revlin describes how it is an important economic ideal to use productivity to create opportunity for the good of the community in such a way that allows for sustainable growth and health of the economy.
“How to Keep Growing”
In his article “How to Keep Growing “New Economies”, Jerry Jordan contends that previous economic models have not been useful in maximizing social welfare, and that instead, the key to sustainable prosperity is “the strength of the underlying economic infrastructure.” Jordan...