The summer’s most talked about working paper in economics is by Robert Gordon, and it is simply titled “Is US Economic Growth Over?” […]
Gordon has been arguing since the days of the dotcom mania that the information revolution looks rather puny compared with earlier waves of innovation, such as the internal combustion engine, indoor plumbing, electrification and the telephone – all of which took hold from about 1850 to 1900. This claim was plausible then and it’s plausible now. (Would you rather give up the smartphone, Facebook and broadband – or hot running water and your flush toilet?) […]
Economic growth is a modern invention: 20th-century growth rates were far higher than those in the 19th century, and pre-1750 growth rates were almost imperceptible by modern standards. Many have seen this as an encouraging trend, but Gordon draws a different lesson: growth is a recent phenomenon, so why assume that it will last?
If Gordon is right to claim that modern inventions are less impressive than those of the late 19th century, we would expect to see slow growth in US real GDP per capita. And, indeed, growth has been slowing since the 1960s, even setting the current recession to one side. […]
Even assuming that climate change can be managed, there are limits to the rate at which we can burn fossil fuels, grow food and mine metals. Renewable energy sources are available, but less plentifully than we might hope. […]
We’ve lived with astonishing economic growth for 250 years; perhaps we are starting to take this exciting companion for granted.