Has the U.S. economy peaked? Economist Robert Gordon makes the case it has in his new book, “The Rise and Fall of American Growth,” reports Chris Matthews of Fortune.
In the book, Gordon notes that advancements like indoor plumbing, the electrical grid, the automobile, and the Internet don’t come around too often in human history.
Gordon writes: “There was no economic growth over the eight centuries between the fall of the Roman Empire and the Middle Ages. Historical research has shown that real output per person in Britain between 1300 and 1700 barely doubled in four centuries, in contrast to the experience of Americans in the twentieth century who enjoyed a doubling every 32 years.”
Innovation and technological development have always been difficult topics for economists to tackle. Economists have come to measure it the same way that physicists spot black holes—by looking at how it affects things we can see, like GDP growth. We know GDP growth is in part a product of the accumulation of capital—things like factories and equipment, plus the growth of the labor pool. But GDP grows faster than the combination of capital and labor.