These four components are important because economic growth and the natural level of the real interest are directly affected by growth in total factor productivity. Further, slower growth in population or declines in participation rates due to aging, other things being equal, can reduce the natural or long-run real rate of interest and lower per-capita economic growth.
Gordon’s view of stagnation is based on his evaluation of data over a long sweep of economic history. He has noted a decrease in total factor productivity, a decline in the growth rate of human capital, reduced hours per worker, and a decline in labor force participation rates. He dates the beginning of stagnation in these factors to 1972.