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ENDNOTES

  1. See Federal Reserve Bank of Kansas City (1992).
  2. See Mankiw (1997).
  3. The misery index is the sum of: the unemployment rate, the inflation rate, and the quarterly change in the long-term Treasury interest rate, less the deviation of quarterly real GDP growth from its 10-year average.
  4. The most commonly cited factor in this regard is the recent effort of businesses to rein in benefit costs (and in particular, health care costs).
  5. See Greenspan (1997).
  6. See Hall and Jones (1997). The term infrastructure, as used here, does not refer to a nation's roads, bridges, highways, tunnels or other structures.
  7. Broadly speaking, growth of per capita GDP (living standards) is the sum of output per hour (labor productivity) and the number of hours worked per capita (labor intensity). By this formula, the U.S. economy's potential growth rate appears to be between 2 percent and 2.5 percent, with labor intensity contributing about 1 percent of this growth and labor productivity contributing roughly 1 percent to 1.5 percent. A good discussion of this topic can be found in the Minneapolis Fed's 1996 Annual Report.
  8. See Kliesen (1996).
  9. See Slifman and Corrado (1996).
  10. See David (1990).
  11. U.S. students were compared with those from the other Group of Seven (G-7) countries: Canada, France, Germany, Italy, Japan and the United Kingdom.

REFERENCES

David, Paul A. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," The American Economic Review (May 1990), pp. 355-61.

Greenspan, Alan. "Remarks at the University of Connecticut," Storrs, Conn., October 14, 1997.

Federal Reserve Bank of Kansas City. Policies For Long-Run Economic Growth, A Symposium Sponsored by the Federal Reserve Bank of Kansas City (1992).

Federal Reserve Bank of Minneapolis. Breaking Down the Barriers to Technological Progress: How U.S. Policy Can Promote Higher Growth, 1996 Annual Report.

Hall, Robert E. and Charles I. Jones. "Levels of Economic Activity Across Countries," The American Economic Review (May 1997), pp. 173-77.

Kliesen, Kevin L. "Critiquing the Consumer Price Index," The Regional Economist, Federal Reserve Bank of St. Louis (July 1997), pp. 10-11.

Mankiw, N. Gregory. Principles of Economics (Fort Worth, Tex.: The Dryden Press, 1997).

Slifman, Larry and Carol Corrado. "Decomposition of Productivity and Unit Costs," Mimeo, Board of Governors of the Federal Reserve System (November 18, 1996).