In 2015 he had predicted productivity growth of only 1.5% a year over the next 25 years. Recent developments have made him more optimistic, and he expects annual productivity growth of about 1.8% this decade.
We can trace the recent developments directly back to what we’ve dealt with over the last year. The Coronavirus was a shock to the system, and we immediately responded.
Business investment rose 17% in computer equipment, 6% in software, and 1% in research and development, even as GDP fell 2.4% in the fourth quarter from the same period a year earlier. Investment in automation and technology accelerated to 7% year-over-year growth in the third quarter of 2020 from 5% growth in the same period a year earlier
Josh and I will talk about the potential for the roaring 20s and much more on tonight’s What Are Your Thoughts? We’re live at 5:30. Hope to see you there:
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Michael Batnick is a managing partner at Ritholtz Wealth Management. He is the co-host of Animal Spirits, What Are Your Thoughts, and The Compound and Friends. For disclosure information please see here.
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