Friday, February 24, 2017

So, why do people think growth was slow in the 1970s?

Last week we looked at Scott Sumner insisting that growth was good in the 1970s. We pretty much all agreed he was right, me and the people I quoted on that. So why does Sumner make such a big deal of it? More to the point, where did the idea come from, that growth was not good in the 1970s?

I dunno. But in 1983, in Oil and the Macroeconomy since World War II, a young James Hamilton opened with these thoughts:
The poor performance of the U.S. economy since 1973 is well documented:

    1. The rate of growth of real GNP has fallen from an average of 4.0 percent during 1960-72 to 2.4 percent for 1973-81.
    2. The 7.6 percent average inflation rate during 1973-81 was more than double the 3.1 percent realized for 1960-72.
    3. The average unemployment rate over 1973-81 of 6.7 percent was higher than in any year between 1948 and 1972 with the single exception of the recession of 1958.

This decade of stagnating economic performance coincided with ...

And his paper has been cited almost 2700 times.


The Arthurian said...

The economy was not slow on its own in those years. It was slowed by anti-inflation policy. The outcome may be the same either way, but the understanding of the world is different.

The Arthurian said...

28 Feb: Hamilton's paper cited 2703 times.