Growth Potential of the U.S. Economy and the “Shale Revolution”

Overcoming the Financial Crisis and Anticipating a “Reverse Oil Crisis”

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With the financial crisis as a trigger, concerns arose that the growth potential of the U.S. economy would decline. Notwithstanding, if we examine the determinants of growth potential, namely, trends in the supply of labor, inputs of capital, and productivity, we find that the growth potential of the U.S. economy had already begun to decline early in the 2000s, and the economy was headed for a period of low growth. We can also state that the accumulated imbalances in finance created an economic bubble and then led to the bubble’s collapse. On the other hand, around the time of the financial crisis, there were no major changes in labor supply, capital inputs, and productivity, and there is no evidence of changes in growth potential in the United States.