A Farewell to Growth
THE SOURCE: “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” by Robert J. Gordon, in NBER Working Papers, Aug. 2012.
Economic growth as we know it is over, argues Northwestern University economist Robert J. Gordon. It hasn’t ended completely, but the United States will never again see living standards double in a few decades, as they did between 1957 and ’88. Indeed, Gordon calculates that it will take a century for the U.S. economy to achieve a comparable improvement. Not only have the most important growth-generating innovations already occurred, but the United States faces powerful “headwinds” that will dampen the progress that does take place.
There have been three industrial revolutions in U.S. history, Gordon observes. The first occurred between 1750 and 1830, when steam engines, cotton gins, and railroads transformed manufacturing and transportation. The second (1870–1900) produced electricity, the internal combustion engine, running water, and indoor plumbing. We are still in the midst of the third revolution, involving information technology, which began in the 1960s and reached its climax three decades later.
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