Technology Dynamics and Growth

According to the Solow Model, productivity growth is the key to long-term, sustained economic growth. In practice, this is quantified by a blunt measure of economic efficiency called total factor productivity (TFP). Referred to as a "measure of our ignorance" by Robert Solow himself, TFP is calculated by summing up all growth that is not … Continue reading Technology Dynamics and Growth

Premature Deindustrialization: Economic Growth Then & Now

The conventional path for economic development has been to use industrialization — the process of increasing industry's relative contribution to total GDP and employment, at the expense of those of agriculture and services — as a means to enable rapid convergence. "Convergence" refers to a catch-up effect whereby countries that have low levels of income … Continue reading Premature Deindustrialization: Economic Growth Then & Now

The Energy-Development Nexus

Energy and economic development significantly affect one another. Exactly how they do so, though, is far from straightforward and depends on a dizzying web of interrelated complex systems. As such, this post will not provide the reader with a definitive relationship between the two, but rather will provide an overview of topics regarding the relationship. … Continue reading The Energy-Development Nexus

The Causes of the Wealth of Nations

Sustained, long-term output per capita growth, often referred to simply as "economic growth" is the ultimate goal of most economic policy interventions, and there are a number of models — mathematic representations of the economy — designed to explain how adjusting certain variables affects output per capita. The Solow Model is one of the simplest models of … Continue reading The Causes of the Wealth of Nations

Defining Development

The term "development" generally refers to the level of well-being that people enjoy, but quantifying well-being is not an easy thing to do. The traditional, and still most commonly-used, way to measure and compare levels of well-being across countries is personal income — gross national income (GNI) per capita. A country’s GNI is the value … Continue reading Defining Development