An analysis of the patterns of economic growth in the US

This article seeks to investigate which demand component led and shaped the growth patterns of the US economy between 1954 and 2020 and comprehensive sub-periods relying on a proper allocation of imports. In doing so, it aims to establish whether the external sector can make a positive contribution to growth even in a context of negative net exports. Finally, it seeks to shed light on the reasons for higher or lower output growth, drawing particular attention to the engines of growth in each historical period. This article takes a novel approach in two ways: (1) it calculates and analyzes the decomposition of the contributions to growth for the US; (2) it divides the analysis into sub-periods and engines of growth, separately analyzing movements in the components of the multiplier, the dynamics of each component’s share with respect to GDP, and their respective growth rates. The empirical results show that the very low growth rates experienced between 2008 and 2020 are mainly explained by a minimal contribution of the government sector accompanied by weak demand from the private sector, highlighting the importance of growth-oriented public policies. These negative results have been only partially compensated by improvements in the external sector.