Can the U.S. economy accelerate sustainably?

During his election campaign and even after he entered the White House, Donald Trump was predicting that his policies would accelerate the U.S. economy. The White House website still mentions a return to 4% growth. Such a result would of course help the new administration limit the budget impacts of its election promises, particularly the tax cuts. Faster growth is still possible in the near term, but over the medium term, the challenge is a big one. The U.S. economy’s growth potential should be more around 1.8% in the coming years. Moreover, the policies Donald Trump’s government is likely to put forward do not suggest any acceleration by the main components that support that potential, i.e. labour force productivity and growth. It would therefore be astonishing to see sustained 4% growth in the years to come.