Banker & Tradesman Covers Sichel Presentation on Economy and Innovation
It can be easy to be cynical about the current economic climate but, according to Dan Sichel, professor of economics and former Fed economist, there are reasons to be optimistic.
“The U.S. and Massachusetts economies are back on track... employment has more than recovered from the Great Recession and the financial crisis, and unemployment is back to a level that the Fed might consider equilibrium unemployment,” Sichel said in a video summarizing the talk he gave to attendees at the 2014 Middlesex Savings Bank Annual Economic Outlook Breakfast last month. The talk was covered by the publication Banker & Tradesman.
Sichel, the event’s keynote speaker, shared his views about how today’s local and global economic trends will impact Massachusetts businesses now and discussed his perspective of the long term (2015 and beyond) state of the economy. Sichel acknowledged challenges with the current economic climate, like slow job growth and a sluggish housing market, but pointed to positive trends in technology, saying he believes those current positive trends will continue.
Before coming to Wellesley, Sichel served as part of the senior management team in the research and statistics division of the Federal Reserve Board in Washington, D.C., where he worked on a range of macroeconomic issues, including helping to guide the Fed’s forecast and analysis of the U.S. economy. His book, The Computer Revolution: An Economic Perspective, written during his time as a research associate at the Brookings Institution, analyzed the relationship between information technology and economic growth.
Sichel’s current research projects at Wellesley focus on measuring rates of technological advance for high-tech products like microprocessors and computers. “For microprocessors, our results suggest that technological progress has been much faster in recent years than is reflected in the government's official measures,” Sichel said in an email. “These results provide part of the basis for the more optimistic perspective taken in the talk.”
Speaking to Economic Outlook attendees, he said, “The pace of innovation in the key technologies–semiconductors, cloud computing–of the digital revolution that enable so much of what comes from the digital revolution, and pace of gain are still quite spectacular.”
Sichel said delayed gains from innovations are typical, comparing the digital revolution to the industrial revolution. Banker & Tradesman quoted Sichel: "We're not going to see tremendous progress [next year], but we're going to see progress," adding that Massachusetts, especially the Greater Boston area, may see gains in areas like software and robotics, health care and related sciences, education, and financial services.
Sichel also noted that it is typical to have a high level of pessimism following an economic recession, but he expressed hope that younger generations might be a little more optimistic and willing to push for change. Read more about Sichel’s talk on the Middlesex Savings Bank website, or read the Banker & Tradesman article.