US Economic Growth Potentia

Abstract

This article covers the current problems of US economic growth. The policy instruments that President Biden administration uses in pursuit of the strategic objectives of influencing US economic growth are being discussed. Joseph Biden administration macroeconomic priorities are reflected in the 2023 Economic Report of the President, which calls for stimulating economic growth. The article shows that economic growth is constrained when the size of the economy reaches what economists call “potential gross domestic product (GDP)” or “capacity.” An economy’s long-run capacity depends on such factors as a growing and skilled labor force, high-quality physical infrastructure, and the efficiency of the production process. Current situation on labor market and capital market is being discussed. Actions that affect these markets can either constrain or enhance the capacity of the economy over time. Investing in increased economic capacity enables the economy to accommodate more demand in the medium to long run, which can make it more resilient to economic shocks and minimize the risk of inflationary episodes. The core of the Biden-Harris Administration’s economic agenda is building a foundation for steady, sustainable, and shared growth by increasing economic capacity. To expand the potential growth of the U.S. economy, policymakers need to adjust how the Nation invests in response to negative changes. In some areas changing economic and social context calls for a new approach to increasing the capacity for economic growth. This article discusses how the relevant context in these areas has changed, analyzes pressing current challenges to sustained economic growth, and highlights potential strategies to confront these challenges.