US: The death of innovation, the end of growth

The US economy has been expanding wildly for two centuries. Are we witnessing the end of growth? Economist Robert Gordon lays out 4 reasons US growth may be slowing, detailing factors like epidemic debt and growing inequality, which could move the US into a period of stasis we can’t innovate our way out of. Be sure to watch the opposing viewpoint from Erik Brynjolfsson.

Robert J. Gordon is among the most influential macroeconomists in the world. And the big picture he sees is not altogether rosy

Source: Video © TED Conferences, LLC, provided by TEDTalks via Creative Commons BY-NC-ND license

Speaker Profile: Robert J. Gordon has written prolifically about the problems facing contemporary economic growth, casting a sobering doubt on the ability of our current innovations (what he calls the “third industrial revolution,” including all our fancy gadgets) to power the economy the way previous waves of invention. In a recent paper, he suggests that the repeated doubling of economic growth that characterized the 20th century and was arguably the bedrock for modern society may be decelerating at an alarming rate — especially for the bottom 99 percent of the income distribution. While innovation is continuing apace, he sees the economy buffeted by six headwinds, and a different mix of obstacles for the US economy than for Canada and Europe.

Over the past four decades, he’s also done fascinating work on the economics of the airline industry. He’s authored hundreds of scholarly articles and five books, including his most recent, Productivity Growth, Inflation, and Unemployment: The Collected Essays of Robert J. Gordon, as well as the textbook Macroeconomics, now in its 12th edition. Two key papers to start: “Is US economic growth over? Faltering innovation confronts the six headwinds,” NBER Working Paper 18315; and “Why Innovation Won’t Save Us,” from the Wall Street Journal.

“The point of such papers is to make you think differently. And I was struck by Gordon’s big example: the relative importance of fancy electronics … as compared with indoor plumbing.” Paul Krugman, August 28, 2012

Quotes by Robert J. Gordon

  • “There are four headwinds that are just hitting the American economy in the face: They’re demographics, education, debt and inequality, [and] they’re powerful enough to cut growth in half.”Watch this talk »
  • “Are we going to grow? … If so, that’s going to require that our inventions are as important as the ones that happened over the last 150 years.”Watch this talk »


2 thoughts on “US: The death of innovation, the end of growth

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