Diagnosing the Undiagnosable

Sluggish Economic Growth - MankiwLooking to this chart, one would say that the vital signs of US economy are fading. This is not good, but what’s even worse is that economists have no idea of what’s wrong with the economy. Gregory Mankiw puts forward five possible theories here:

  1. Statistical mirage (it’s the measurement device what’s not working)
  2. Hangover from the crisis
  3. Lawrence H. Summers’s Secular stagnation
  4. Robert Gordon’s Slower innovation
  5. Policy missteps

One sickness, five diagnoses. Time to go visit Dr. Gregory House!

One comment

  1. A truly interesting question.

    What would you suggest should be done to solve the question? Could big data be the solution or it will just be an alibi to the answer chosen beforehand?

    Is it possible to answer or the response will implicit be in the model we choose?

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