Economist Glenn Hubbard Warns of Fading Emphasis on Economic Growth

Glenn Hubbard, a prominent economist, has expressed concern over the diminishing focus on economic growth in the current policy agenda. In an op-ed published in the Wall Street Journal, Hubbard argues that rapid productivity growth is critical for raising living standards, funding public goods, and breaking the zero-sum link in society where someone must be worse off for another to be better off.

Hubbard contends that the disruption caused by growth and technological change has made many politicians wary of prioritizing growth, leading to excessive government intervention through industrial policies. He believes that these policies increase the cost of investments and contradict the economic freedom of voluntary market transactions, ultimately hindering long-term prosperity by discouraging investment and inviting rent-seeking behavior.

Why this matters: The fading emphasis on economic growth has significant implications for the well-being of society as a whole. Without a strong focus on growth, the potential for raising living standards, supporting social programs, and fostering innovation may be hindered, affecting the long-term prosperity of nations.

Hubbard calls for a return to pro-growth policies that account for the effects of disruption while encouraging innovation, saving, capital formation, skill development, and limited regulation. He criticizes the current bipartisan trend of backward-looking protectionism and industrial policy, arguing that they weaken growth and fail to address disruption effectively.

The economist suggests that a shift to prospective, visionary thinking is needed to reorient the economic agenda. "Growth breaks the 'zero-sum' link where someone must be worse off for another to be better off," Hubbard writes, emphasizing the importance of prioritizing economic growth in the policy agenda.

Key Takeaways

• Economist Hubbard concerned about diminishing focus on economic growth in policy agenda.
• Rapid productivity growth critical for raising living standards, funding public goods, and breaking zero-sum link.
• Excessive government intervention through industrial policies increases investment costs and hinders long-term prosperity.
• Fading emphasis on growth can limit potential for raising living standards, supporting social programs, and fostering innovation.
• Hubbard calls for pro-growth policies that encourage innovation, saving, capital formation, and skill development.