1. The Importance of Productivity in an Age of Secular Stagnation

2. All Economic Activity is Ultimately Devoted
to Two Things --

4. Of course, we must also be concerned with...
--- The distribution of income and wealth, and...

5. Of course, we must also be concerned with...
--- The distribution of income and wealth, and...
--- Equal opportunities for future generations, and...

6. Of course, we must also be concerned with...
--- The distribution of income and wealth, and...
--- Equal opportunities for future generations, and...
--- The judicious control of market externalities

7. Government Can Sometimes be Useful in Helping Us Accomplish These Goals

8. Government Can Sometimes be Useful in Helping Us Accomplish These Goals
That is,

9. Government Can Sometimes be Useful in Helping Us Accomplish These Goals
Helping to Control Externalities, Provide a System of Justice and Enforcement of Contracts, Supply Goods and Services that the Private Market Fails to Provide, Ensure a Reasonable Distribution of Income and Wealth, and Moderate the Business Cycle

11. Both C and L ultimately are related to y = output per population
U = utility C = consumption L = leisure
Both C and L ultimately are related to y = output per population

12. We Must Increase
y =
Steadily Over the Long Run

13. How Can We Increase (r1) (r2) and (r3) ?

14. Suppose we just want to increase (r1) which is

15. Child Labor – Not Really
Elderly Workers – Limited at Best

16. Foreign Workers – Maybe, but Problems, Problems
Robot Workers – Not for Many Years

17. No Matter What, (r1) has an Upper Limit
< 1

18. Okay …..suppose we try instead to increase (r2) which is

19. No Sleeping ----
No Eating ---

20. Just Work, Work, Work ---

21. No Matter What, (r2) has an Upper Limit
< 24 Hours/Day

22. In Fact…the Trend is for Less Hours Not More Hours of Work !

25. The Only Reliable, Long Run Way is to Increase
How Can We Increase y?
The Only Reliable, Long Run Way is to Increase
(r3) = Average Labor Productivity

27. Immediate Source: New York Times, April 2016 Link

28. How Do We Get High Growth in Labor Productivity?

29. How Do We Get High Growth in Labor Productivity?
Short Run – Moderate the Business Cycle, Get
the Economy Growing Again

30. How Do We Get High Growth in Labor Productivity?
Short Run – Moderate the Business Cycle, Get
the Economy Growing Again
Long Run – Encourage Saving and Investment

31. How Do We Get High Growth in Labor Productivity?
Short Run – Moderate the Business Cycle, Get
the Economy Growing Again
Long Run – Encourage Saving and Investment
Dilemma -- Are These Two Goals Compatible?

32. Besides More and Better Labor and Capital,
We can also Increase Output per Person with More Land and Raw Materials

33. Terracing Can Give Us More Land – But Ultimately Limited

34. Noordoostpolder, Netherlands
Parts of the Zuider Zee in the Netherlands as Reclaimed Land from the Ocean – Really Difficult and Costly
Noordoostpolder, Netherlands

35. Hong Kong Airport – Land Reclaimed from the Ocean

36. Not Land, but Space, Coupled with Physical Capital

37. Recycling Can Help Us Reduce Some Resource Problems

38. Renewable Energy Can Help a Little in Our Search for Energy

39. Naturally invention and innovation are important, but these are all just another way of saying that we need greater investment in research, development, motivation, education, marketing, production flows...investment will be best when government does not create large distortions, but encourages free trade, competition, and business becomes focused on providing a better product rather than getting a better deal from the government.

40. Ultimately, all our efforts will require saving as a temporary sacrifice -- in order to grow the economy. This is what we must prepare for and why the challenges we face are so daunting to a world that wants results NOW.