Saturday, September 15, 2012

One Economist's View of Growth

Northwestern University's Robert Gordon just published Is US economic growth over? Faltering innovation confronts the six headwinds, a provocative article I recommend reading.  In it, he shows data that supports declining US economic growth since the 1950s, and he provides a framework for understanding it.

What he writes seems related to our earlier discussions on growth and to The Club of Rome's work on the limits to growth 40 years ago.  While that work pointed to an impending clash between exponential growth and finite resources, Gordon's points to evidence of slowing growth in the economic data.  His graph of UK/US economic growth from 1300 to 2007 (with predictions out further) reminds me of Hubbert's pimple on the use of petroleum as a fuel.

There's a difference between Gordon's thesis and that of the Club of Rome, though.  Gordon's article shows S-shaped growth that is coming to an end, while the Club of Rome work warns of potential overshoot.  

Thanks to Mark Thoma for the pointer.

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