US productivity

March 12, 2025

The steady rise in US productivity has been a hallmark of the last 100 years, with implications for rising living standards, geopolitical power, and many other important factors. The rise has been so steady that no living person has experienced anything but a world with the US continuing to get better and better at producing food. But just as in investing, past performance is not a guarantee of future returns. In a recent paper, we show that two major factors may conspire to put a halt to progress - a slowdown in research and development investment that started roughly 20 years ago, and climate change. We conclude that a big rise in investment - roughly equal to what occurred after the world wars - will likely be needed to avoid a serious slowdown. See the full paper or a related story.