Technology Dynamics and Growth

Written by Ryan McGuine // 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 … Continue reading Technology Dynamics and Growth

Closing the Infrastructure Gap

Written by Ryan McGuine // In 2017 the McKinsey Global Institute estimated that the world would need to spend $67tn by 2035, or $3.7tn annually — roughly $1.3tn more than was spent in 2013 — on infrastructure in order to merely keep up with projected economic growth. This difference between current spending on infrastructure and … Continue reading Closing the Infrastructure Gap

Premature Deindustrialization: Economic Growth Then & Now

Written by Ryan McGuine // 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 … Continue reading Premature Deindustrialization: Economic Growth Then & Now

The Causes of the Wealth of Nations

Written by Ryan McGuine // 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 … Continue reading The Causes of the Wealth of Nations