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The 5 percent growth plan: nice but not promising

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Jim Cole / AP

(Read caption) Former Minnesota Gov. Tim Pawlenty answers a question during the first New Hampshire Republican presidential debate at St. Anselm College in Manchester, N.H., Monday, June 13, 2011. Mr. Pawlenty wants to grow the US economy by 5 percent in the next 10 years, but such a plan is too ambitious, writes guest blogger Donald Marron.

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Last week, I argued that Governor Tim Pawlenty’s aspiration for 5% economic growth over a full decade is implausible since the United States has achieved such steady growth only once since World War II.

Over at Economics One, Stanford economics professor John Taylor offers a more positive take, defending the goal and offering a recipe for achieving it: 1% from population growth, 1% from employment growing faster than the population, and 2.7% from productivity growth.

Add it all up and you get 4.7% growth, a bit short of Pawlenty’s target but close enough for government work.

That sounds great, and I hope it happens, regardless of who is president. But let’s take a moment to kick the tires on Taylor’s assumptions.

Two seem fine:

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