Faculty News

Prof. Michael Spence discusses the state of the US economy

Excerpt from Bloomberg TV -- "Right now, the American economy is growing at, let's call it 2%, its potential is probably 3.5. It's all private sector. The economy's flexible, dynamic and restructuring, but the thing is still fiscally constrained, although I think the fiscal drag is coming off. And on a longer-term basis, the American economy, the American government, has been under-investing. Governments make complimentary investments in human capital and infrastructure and things like that in all economies, including developing ones, and we're under-investing. So as long as we continue that pattern, I think the growth will be below the potential and it's very hard to break that pattern when you've got high unemployment and people who are feeling stressed."

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Additional coverage appeared on Bloomberg Businessweek.