Buffett: Productivity and Innovation Could Drive Economic Growth
Warren Buffett on economic growth
Billionaire investor Warren Buffett believes that the US economy has the potential to see strong growth.
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In 4Q16, US (SPY) (QQQ) (VFINX) real GDP grew at an annual rate of 1.9% compared to a 3.5% rise in 3Q16. The OECD (Organization for Economic Co-operation and Development) projects that US GDP could grow at an average rate of ~2.6% over the next ten years.
Warren Buffett believes there are two factors, productivity and innovation, that could drive US economic growth in the future. He believes if all people work, then it will increase the productivity of the economy. He also believes that innovation has an important role in economic development.
Bond guru Bill Gross also said that US economic growth depends on productivity. Gross believes that the US economy will receive more investment during Trump’s presidency. Earlier, productivity wasn’t enough to push economic (IWM) growth up. He believes companies will receive capital investment that will help them increase their capacity and thus their productivity. Higher productivity is necessary for stronger economic growth (VFINX) (IVV) (VOO).
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