If Republicans have the story correct, the Trump tax cuts will boost economic growth by boosting work, savings, and investment. And when it comes to the corporate tax cuts in particular, the mechanism for growth — the expansion of the capital stock and the resulting increases in productivity and wages — is likely to play out over a number of years, as my AEI colleague Alan Viard has explained.

I noted in a recent column for The Week that the Reagan tax cuts were not followed by a productivity boom. That didn’t happen until the mid-1990s. And given the huge drop in unemployment and overall demographic doldrums, expectations of much faster GDP growth for any sustained period will depend on much faster productivity growth. And how’s that doing? Well, productivity numbers can be volatile, especially on a quarterly basis. For instance, Q4 productivity edged down at a 0.1% annual rate in the fourth quarter, following a 2.7% increase in the third quarter that was revised down three-tenths. Yet over the past year, productivity growth was up 1.1%, not great but an improvement over 0.8% in 2016. Still, without much faster productivity growth, this is really just a 1–2% economy given America’s demographic situation suppressing labor force growth. (See above chart.) This is one reason why cutting back immigration is an own goal as far as economic growth goes.

Then again, if the current GDPNow forecast from the Atlanta Fed is correct, some amazing things are happening in the US economy. Has the next productivity wave finally arrived? Maybe not. From CNBC:

The economy is on track to put up blockbuster growth numbers in the first quarter, according to the latest forecast from the Atlanta Fed. GDP is expected to surge 5.4 percent to start 2018, the central bank branch estimated in its latest rolling look at how the economy is progressing. If the forecast holds, it would be the best quarter since the Great Recession ended in 2009. The previous highest was third quarter of 2014, which hit 5.2 percent. However, the Atlanta Fed’s tracker has shown to have reliability issues in the past. In particular, the model’s sensitivity to the ISM Manufacturing Index has led the gauge astray multiple times, causing growth to be overstated. The ISM numbers were the principle impetus for the raise in growth projections Thursday.