Our latest podcast, “Why America’s Economic Growth May Be (Shh!) Over,” is based on a much-discussed paper (abstract, PDF) by the Northwestern economist Robert J. Gordon. It is a fascinating paper that is well worth a read, and its provocative argument has certainly gleaned a lot of attention.
Over the past month I have taken a close look at Gordon’s paper, the data he relies on and the papers that he cites. My conclusions are that Gordon’s analysis is deeply flawed and tells us essentially nothing about the potential for future economic growth. It does help to reveal a big gap in the discipline of economics, and that is the utter lack of an explicit theory of growth and the mechanisms by which it actually takes place. What Gordon has provided, in his own words, is a “a provocative fantasy” one that tells us much about the discipline of economics but little about the state of the world.
I am not much for making predictions, but I wouldn’t be shocked if Gordon’s paper soon inspires a public forum or two on the topic and that Pielke is invited to rebut.
With the Presidential debate finished, we are officially in the final lap of America’s second-favorite spectator sport. (Yes, football is better than politics.) Of all the talking that Barack Obama and Mitt Romney will do by Nov. 6, you can bet that a great deal of their breath will be expended on economic matters. Because that’s what the President of the United States does, right — runs our economy?
That, of course, won’t stop the candidates from talking about their plans to “fix” or “heal” or “restore” our economy — all of which imply that we are in an economic doldrums that is sure to pass. But what if it doesn’t? What if the massive economic growth the U.S. has experienced through most of our history is a thing of the past?