Global Macro Outlook: The secular stagnation that never was?

Downbeat estimates of potential growth may be due for an upgrade just as the stars align for a productivity pickup - helping keep US economic overheating contained.

Highlights

• We find that estimates of potential growth are sensitive to cyclical conditions. The snail’s pace of the recovery made it harder to separate cyclical from structural forces – and the cyclical drags were interpreted as permanent damage. 
  Estimates and perceptions of potential growth may now turn more positive as actual growth enjoys a sustained acceleration.
• Productivity – an important driver of potential growth – has not kept pace with solid spending on research and development (R&D), implying pent-up gains that may soon be realised. Global integration also fosters productivity growth.
• Better long-run growth should further lift real yields. Equities can still do well: Improved growth should also boost earnings in tandem, while abundant global savings should limit how high yields go.

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Original post on BlackRock.com