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Business Economists Foresee Slowdown in Growth

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If you’ve ever spent time with a couple of economists, you may walk away thinking they never agree and enjoy criticizing each other’s models and assumptions. After spending a few days with over 300 economists at the National Association for Business Economics conference last week, I walked away with a different view.

The possibility of recession and trade wars was a hot topic. An NABE panel predicts the nation will not see a recession in 2020, but that the real gross domestic product growth rate will slow to 1.8% — the first time since 2016 it has fallen below 2% with risks on the downside.

The forecasters now expect GDP growth this year to fall to 2.3% this year from 2.9% in 2018. In June, the forecast for 2019 had been 2.6%.

Deepening trade wars with China remain one of the biggest risks to U.S. economic growth, but some analysts were quick to point out the damage should be small since we are not as dependent on trade as other nations. The global economy is slowing from 3.6% in 2018 to a current 3.2%, but the impact on our economy should be minimal in light of our relatively low exports.

One session at the conference, titled “Developments and Trends in U.S. Labor Supply,” was the most memorable. It was held in honor of Alan B. Krueger, the late Princeton University economist who served as an adviser in the administrations of Presidents Bill Clinton and Barack Obama and was an expert on the labor market.

On the gig economy, Krueger worked closely with the Bureau of Labor Statistics to craft new questions for the Contingent Workforce Survey to assess its size.
Based on the results of the May 2017 survey, less than 1% of the total U.S. workforce used an online platform like Uber, Lyft, TaskRabbit or others to arrange work in the month prior to the survey — much smaller than many had expected.

Jonathan Gruber, a professor at MIT and a former student and friend of Krueger, ended his speech with a comment that we should all take to heart.

“After Alan passed, I was talking with a senior colleague about how Alan was a real hero of mine — that along every dimension of career that I care about [research, policy and breadth] he had been a leader,” Gruber said. “My colleague told me that I was something like the seventh person who had said that to him. And then I realized that I had never told Alan I felt that way — and I was betting that the others had not, either. It made me realize the importance of telling those we admire of our admiration rather than just sharing criticism.”

This commentary originally appeared in the October 13, 2019 edition of  The Richmond Times-Dispatch.
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