The Past and Future of Economic Growth: A Semi-Endogenous Perspective
The nonrivalry of ideas gives rise to increasing returns, a fact celebrated in Paul Romer's recent Nobel Prize. An implication is that the long-run rate of economic growth is the product of the degree of increasing returns and the growth rate of research effort; this is the essence of semi-endogenous growth theory. This paper interprets past and future growth from a semi-endogenous perspective. For 50+ years, U.S. growth has substantially exceeded its long-run rate because of rising educational attainment, declining misallocation, and rising (global) research intensity, implying that frontier growth could slow markedly in the future. Other forces push in the opposite direction. First is the prospect of "finding new Einsteins": how many talented researchers have we missed historically because of the underdevelopment of China and India and because of barriers that discouraged women inventors? Second is the longer-term prospect that artificial intelligence could augment or even replace people as researchers. Throughout, the paper highlights many opportunities for further research.
Draft in preparation for the Annual Review of Economics. I am grateful to Jean-Felix Brouillette, Pete Klenow, Michael Peters, Chris Tonetti, and seminar participants at the Atkinson Lecture at Oxford University for many helpful discussions and suggestions. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Charles I. Jones, 2022. "The Past and Future of Economic Growth: A Semi-Endogenous Perspective," Annual Review of Economics, vol 14(1). citation courtesy of