Although many of these factors may play a role in limiting wage and productivity growth, the US economy has also undergone several structural changes: 1 persistently low inflation expectations, 2 shifts in workforce demographics, as Baby Boomers exit and Millennials enter the workforce, and 3 the changing distribution of payrolls by industry favoring lower-pay sectors.
The World Bank and major donors at the First Meeting of the Consultative Group of Papua New Guinea in May this year commended Papua New Guinea on the management of its economy, especially reduction in the fiscal and current account deficits, adoption of borrowing policies and low inflation rates, and the recent initiatives to plan development expenditures more systematically and to direct public spending away from general administration to productive sectors in the essential infrastructure.
If America suddenly got a 6.5% NGDP growth rate for a single quarter, and it broke down as 1% inflation(i.e. 1% less than the normal 2%) and 5.5% real GDP growth, then I think most people would see that as a sign of robust AD, even though they would be mildly surprised by the low inflation number.
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