The Becker Friedman Institute for Economics (BFI) and the Chicago Economics Society (CES) hosted the Kenneth C. Griffin Department of Economics’ Ufuk Akcigit, Professor in Economics and the College, for a conversation on the productivity slowdown and declining business dynamism in the US. Deniz Igan, the Deputy Chief of the IMF Research Department’s Macro-Financial Division, moderated the discussion.
Market economies work best when less-productive firms are challenged by new entrants or other more productive businesses, even if it means that some firms fail. Such business dynamism results in higher-paying jobs as workers leave failing businesses and move to more productive firms. However, since the 1980s, and especially over the last two decades, such creative destruction has been absent from the US economy. Why is business dynamism on the wane in the United States? What is the impact on future economic growth?