New Economy Growth Decomposition in the U.S.

The drivers of economic growth in what is called the New Economy has become animportant policy question. As communities across the country face economic challenges and a new economic reality, the question of what works in the New Economy has emerged. This study aims to provide growth decomposition in the New Economy to identify key drivers of growth. It provides a conceptual, theoretical and empirical discussion of growth in the New Economy tosolidify the theory and empirics of New Economy growth decomposition. Results suggest that growth in population, income and employment are mostly synergistic; innovation and talent are potent in the New Economy; population dynamics, especially in the young and retiree segment of the population are tied to local economic performance; housing market instability harmsgrowth; green infrastructure assets enhance growth performance; and that economic legacy and entrenchment in the Old Economy can impact new growth potential. The framework, analysis and results in this study can provide the basis for further investigation in the area of New Economy growth accounting.