Suppose I told you that the economy was about to go through its greatest financial convulsion in 75 years, causing a vicious disruption in the credit system and the global trading system. Consumers and small businesses would suddenly be cut off from access to credit, and large businesses would go into a fetal crouch and stop investing. A priori , would you expect that such a scenario would lead to
a) An acceleration in productivity growth, or
b) A deceleration in productivity growth or even a drop in productivity.
My guess is that a majority–perhaps even a great majority–of economists would have answered (b) if I had thought to put the question to them. After all, disruptions to credit, trade, and investment are terrible for the normal operations of business.
Why, then, were economists willing to accept the productivity surge of 2007-09 as gospel? It made no sense that businesses should suddenly function better in the face of a financial crisis that nearly dragged down the whole economy.
I’ve noticed this willingness of many economists (and journalists, for sure) to accept the official data as gospel before. It’s not a good thing.
P.S. You may guess that I’m revising my textbook.