Trump’s anti-growth policies

[WASHINGTON, DC] Imagine someone announcing that they are going on a diet and then quitting exercise, doubling their caloric intake, and giving up just one piece of chocolate a day. Most people would conclude that the real goal is to gain weight, not to lose it. The same could be said of US President Donald Trump’s economic policies: while allegedly aimed at stimulating growth and reducing inflation, they are likely to have the opposite outcome.

Historically, economic growth has been driven by innovation, capital accumulation, an educated and expanding workforce, increased efficiency, and the movement of people from rural areas to cities, where productivity is much higher. Among economists, there is broad consensus that growth thrives in a business-friendly environment governed by the rule of law.

But today, with labour-force growth slowing, there are few remaining gains to be made by shifting people from agriculture to higher-productivity sectors such as manufacturing and services. As traditional growth engines sputter, the most promising path forward lies in supercharging innovation, investing in education and training, and boosting capital accumulation.