Thursday, October 30, 2014
31

创新危机还是金融危机?

发自剑桥——随着一年的增长迟缓继续蔓延到下一年,人们对未来几十年的未来走向也出现了越来越多的争议。全球金融危机对发达国家的增长来说究竟只是一个残酷但短暂的挫折,还是暴露了更深层次的长期经济低迷?

最近,包括互联网创业者彼得·泰尔(Peter Thiel)和政治活动家及前国际象棋世界冠军加利·卡斯帕罗夫(Garry Kasparov)在内的一些作家都支持对经济放缓作相当激进的解读。在一本即将出版的书中,他们提出发达国家经济增长的崩溃不仅仅是金融危机的后果;而是从根本上反映了其科技和创新方面的长期停滞。同样地,如果不彻底改革创新政策,这些国家就不大可能出现生产力增长的可持续回升。

经济学家罗伯特·戈登(Robert Gordon)对这个观点思考得更为深入。他提出工业革命之后的250年技术高速进步时期有可能会被证明是人类历史上停滞规则的一个例外。事实上他认为相比从前的科技进步——例如电力、自来水、内燃机的发明和其他距今一百多年的突破性发明,现在的技术创新都黯然失色。

我近期在牛津大学与泰尔、卡斯帕罗夫讨论科技停滞这个观点,加密技术方面的先锋人物马克·沙特尔沃斯(Mark Shuttleworth)也加入了我们的讨论。卡斯帕罗夫尖锐地提出这样一个问题——像Iphone 5这种产品到底提高了我们的什么能力,并指出大多数现代计算机背后的科学原理在上个世纪七十年代就已经解决了。泰尔认为通过宽松的货币政策和高度扩张性的财政刺激来对抗经济衰退的努力并没有对症下药,因此可能是非常有害的。

这些都是很有意思的想法,然而现在的迹象依旧在很大程度上表明拖累全球经济的主要是深层系统性金融危机,而不是一个长期的世俗创新危机。

当然也有一些人认为科学的泉源正在枯竭,而且当人们认真观察时会发现,驱动全球商业发展的最新产品和创意本质上都是衍生品。但我那些在顶尖大学的绝大部分科学家同事们似乎对他们在纳米技术、神经学、能源等尖端领域上的项目感到很兴奋。他们认为他们在以我们从来没有见过的速度改变着这个世界。坦白说,作为一个经济学家,当我想到停滞的创新时,我很担心过分的垄断会扼杀创意,并且担忧近期延长专利有效期的变化是如何令这一问题进一步恶化的。

但引发最近经济衰退的主要原因显然是全球信贷繁荣及随之而来的灾难。当前的经济颓势与过去深层系统性全球金融危机所造成的后果的深刻相似之处可不仅仅是性质上的。危机的迹象显著分布于从失业率到房价以及累积债务等指标之上。不出意外,当前的时代看起来也跟过去几十个严重金融危机爆发后的时期非常相似。

诚然,信贷繁荣本身可能源于围绕着经济增长潜力所产生的过度乐观——这是受全球化和新科技影响的结果。正如我和卡门·瑞哈特(Carmen Reinhart)在《这次不一样》一书中所强调的那样——这种乐观通常伴随着信贷的急剧增长,这也不是全球化和科技创新第一次扮演核心作用了。

把目前正在持续的经济放缓归咎于金融危机并不意味着就没有长期的持续性影响——其中一些影响就深植于危机本身。信用紧缩几乎总是无情地打击小型企业和新兴企业。由于许多最好的新思想和创新都来自小公司而不是老牌大型企业,当前持续的信用紧缩必将导致长期增长成本的产生。同时,失业以及未充分就业的工人技能正在退化。现在很多大学毕业生也饱受挫折,因为他们不太容易找到最能提高自身技能的工作,因此也削弱了他们的长期生产能力和收入。

由于现金拮据的政府推迟急需的公共基础设施工程,中期增长也会受到损害。而且,不管技术趋势如何发展,其他长期性因素——比如大多数发达国家的人口老龄化,也正影响着经济增长的前景。即使没有危机的出现,各国也得对养老金和医疗保险项目做出艰难的政治调整。

综合起来考虑,很容易设想得到GDP增长走向在未来十年——可能不止十年——比正常水平低1%。如果卡斯帕罗夫-泰尔-戈登猜想正确的话,经济前景会更加黯淡——而对改革的需求也就更迫切。毕竟,大部分要摆脱金融危机的计划都假设科技进步将会为生产率增长提供一个的坚实基础,而这最终将会巩固持续的经济复苏。如果经济大饼停止快速增长,那么我们就得面对更加痛苦的抉择。

那么,引起近期经济放缓的主要原因究竟是创新危机还是金融危机?也许两者兼而有之,但可以肯定的是过去几年经济创伤反映的首先是一个金融危机,尽管未来前进的方向也必须同时清理其他障碍以保证长期增长。

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  1. CommentedStephane Levasseur

    Mr. Rogoff,

    I agree with your idea but I suggest a simpler way of explaining it:

    In developped countries, 70% of the economy are services provided to humans by humans. Today's technological innovations are thrilling but are of less economic significance because they won't lead to a major increase in economic output. Science and technology can mainly improve the primary and secondary sectors of the economy. Its impact on the third sector (services) is limited.

    Growth in a service economy is achieved by improvement of human capital: education, research in social sciences, economics, psychology, etc. The economy will grow if we have better teachers, managers, policy makers, economists...

    What do you think of my view?

    Stephane Levasseur

  2. CommentedNathan Coppedge

    I would like to avoid the extensive use of mere words to symbolize what may be highly invisible and transparent factors, which may ambiguously represent both problems and solutions. We must realize that the word 'problem' is just a word, as useful as it seems. If increasingly global needs are provided for, this is a solid sign for GDP, in real terms if not in statistical terms.

    On the subject of Moore's Law-type thinking, I suspect that in the real economy what we know as technologies are only a small part of industry. Manufactured goods are a resource whether they are purchased or given away for free. Perhaps industry (real industry, which does not exist for most of us) should use its cheap production advantage to boost the middle class. Then a means can be found to interpret material resources as viable incomes. I suspect this has been done in the past. At any rate, it is likely that there has been too much emphasis on small-scale production, which dishonestly projects that all industries have high production costs. I suspect this is not the case. When considering invisibility, and the existence of cheap production for a select group, then (even in this developed case) it seems that Rogoff is right, that debt is the real factor that remains. Even with an exponential technology production, there is a reliance on pre-existing industries, which essentially define what is real and false, scalable to per-capita income, not GDP.

  3. CommentedBenjamin Hawkins

    Mr.Rogoff briefly touched on the issue of Intellectual Property Rights, which is surely a policy domain that requires closer scruitiny -- for a number of reasons. Perhaps most importantly in the context of this discussion, however, is the imposition of stringent TRIPS and TRIPS-plus IRP conditions on developing countries such as China and India through the WTO and free trade agreements. Such short-sighted policies ensures that the creativity and innovative capacities of over 2.5 billion people in these two countires alone is not being fully utilised.

  4. CommentedCher Calusa

    I agree with the economists quoted in this article in the respect that we have been treating the wrong disease. It's interesting that they believe that there is lack of innovation in the secular technology. Actually, there has been tremendous growth in the military technology sector . So by the reasoning cited in this article, we can draw a conclusion by artificially dividing the military economy and the general economy? This makes no sense whatsoever. These two parts of the world economy are not sequestered into some isolated scenario. There is no stagnation in innovation. We are simply not aware of every advancement in science and technology that is proceeding without the knowledge of the general public.. Our "disease" is that we imagine separations and situations that don't exist in reality and we formulate a theory or opinion and consider it valid, regardless of tested success. These fabrications come about due to our skewed perception of reality. An honest examination of the natural universe within which we live yields the same results repeatedly from the microscopic to the macroscopic levels. It's a fact that all life, and thus activities by living beings, coexist in a huge reflexive system. When considering every stable and unstable variable in living systems, progression and regression follow natural laws of cause and effect that tend to create balance. The closer we come to mimicking the natural balance among all living systems, the better quality of life and growth we'll have on every level. What we see repeatedly in healthy living systems is a level of cooperation that tends towards the integrity, sustenance and growth of each part of that system. Instead of imagining that we've created some new method of growth and balance that exists in a vacuum and then calling it "The Economy", we should begin understanding that mutual cooperation and development between and among all people and groups participating on this planet will yield predictable and consistent results. The natural economy has no deficits and is never stagnant. We create all deficits through our ignorance of the reciprocal system of which we are a part.

  5. CommentedHenrik Ørsted

    The financial crises almost certainly does not have a single cause, but it certainly has nothing to do with a lack of innovation. Innovation cannot do away with the axioms of physics. They are here to stay, even though in the 1950ies there were science fiction artists who predicted that we would by now drive hovering cars without wheels. The problem of the financial crisis is in my opinion a total different one: namely the problem of Big Data and the incapacity of the players in the financial industry to be good at mathematics. Financial times series, Markov models are models brought up for convenience not having to crunch the real numbers. Every statistics package has integrated these models and even they are heavily used in physics, which in my opinion should be a rigid scientific discipline, they might not be valid. We have to stop to map our imagination onto mathematical models, they might lead to severe errors of judgement and impair our future substantially. We should rather place our hopes in a better mathematical education, transparence and accept that humanity is constrained my its physical boundaries.

  6. CommentedKen Fedio

    Rogoff isn't saying what he really thinks. He knows that this economic epoch is ending; not with a bang, but with a whimper. As for technological innovation: it only contributes to economic growth if it raises productivity AND living standards. The benefits of techadvan are so unevenly distributed that they are an impediment to general socio-economic advancement . Ask one billion Chinese ; or 100 million Africans; or 50 million Americans.

  7. CommentedAndrew Purdy

    No one who has commented on this article seems to "get it". The big innovations of the 19th and 20th century - electricity, powered machines, oil, petrochemicals, engines, flight, etc... were all about the ability to generate and utilize energy. Energy is required to have real economic growth. Money is nothing but a claim on useable energy. Current innovations in electronics, nanotech, etc.. are mostly about the manipulation of information and to some extent using energy more efficiently, but do not add much to the supply of energy or enable physical transformations to take place on a larger scale. Continuation of exponential growth requires ever greater sources, utilization, and transformations of energy, and the science to do this does not exist right now. As the fossil fuel era winds down to a close, one should expect more and more stagnation, and that stagnation will continue until either the energy of the sun or the full mc^2 of matter can be economically extracted and utilized. We could be in for centuries of stagnation unless Science comes up with some really radical breakthroughs.

  8. CommentedSuhan Gurer

    I think the main point here is not innovation but invention. We have been innovating a lot, but inventions or crucial ones at that are less in numbers.

    However, trying to create a make up for the current crisis based on lack of crucial scientific advances is in reality downplaying the blind optimism of the finance world which led us to the crisis in the first place.

    Throughtout the history, it has been debated that science has come up to its boundaries tons of times. Every time something came up and changed the world. No need to run around shouting we are at a dead end.

  9. CommentedCarol Maczinsky

    Innovation drives through challenges. The trick is for an economy to set itself challenges, such as to lower the consumation of energy and switch to renewables. Also disaster relief and protection are interesting endevours. It is interesting to see the example of Japan, an economy constantly challenged by natural disasters and natural constraints.

  10. CommentedCiril Bosch

    Mr Rogoff,
    I am surprised at such a piece, supported by such poor arguments.

    Do you really believe the question is "what does an iphone 5 add to our capabilities?" If so, I would suggest to have a look at pictures of Mogadiscio, and tell me what is surprising about them (hint: it has to do with cell phones...not necessarily iphone 5).

    I suggest you check the at&t campaign "you will" from the 90's (http://alturl.com/h78f9). It is hard to argue the technological stagnation idea after seeing how much more productive our tools are compared with just 10 years ago.



  11. CommentedJohn Brian Shannon

    Hi Kenneth,

    Fascinating piece.

    Economics, like democracy -- is always a 'work in progress'.

    There are no perfect economies and there are no perfect democracies.

    Each generation makes its mark to further protect union and enhance the economic realization of that union.

    Landing men on the Moon directly correlates with the invention of the printing press -- no printing press, no huge, available and constantly-upgraded knowledge base for thousands of scientists over the centuries since then, for our generations to draw from. (Someone from NASA said this)

    This proves that all the technology since the printing press is derivative of that original invention.

    Similar could be said about the invention of the wheel, the invention and the capture for use, of electricity.

    All the inventions these days are merely derivatives of earlier inventions.

    Although the global knowledge base doubles every few years nowadays, it is all knowledge being added to the existing knowledge base. It is not new, it is additional knowledge.

    With regard to economic policy, the same applies. It is certainly in our best interests to improve on economic thought, building on what we already know to be true as demonstrated by the many empirical examples we have seen.

    We have gone from learning the basics (the abacus) to multiplication tables, graphs, algorithms, Algorithmic information theory, Computational complexity theory, Complexity economics and Predictive Behavior Modeling.

    Now that we have arrived in the 21st-century and our economic thinking has advanced, we find ourselves grasping for a better understanding of what we see going on around us, economically-speaking.

    All of the foregoing are useful and can explain what has happened, but does not predict well what will happen.

    What is missing is human psychology. Economics is a form of human expression, how people feel is how they spend, how they react to different stimuli affects the economy, in large ways.

    When human psychology becomes fully integrated into the economics classroom, we will have fulfilled our hopes to predict every future economic indicator to an exact degree.

    Then, adjusting policy, rates, regulations and economic theory to match those patterns will become light-years more accurate and efficient.

    In short, the entire economy revolves around human psychology, which continues to happen right in front of us.

    Bull market, bear market, recession, housing bubble, recession, financial crises, etc... are all directly a result of human expression.

    "So, is the main cause of the recent slowdown an innovation crisis or a financial crisis?"

    No. It is a lack of full and deep understanding by economists and policymakers of the human psychology expressed in the trillions of individual economic actions every day -- combined with a lack of ability by economists and policymakers to enhance the positive aspects of human action/reaction and preempt and marginalize the negative expressions of human economic action, in order to better perfect our economic union and the economic status of the people in that union.

    As always, very best regards, JBS
    http://jbsnews.com






  12. CommentedStéphane Genilloud

    Why does it have to be about productivity growth? Innovation can trigger a boost in demand as well. The post-war period was marked by fabulous inventions that everybody wanted to own, but with little effect on productivity: cars, fridges, tv-sets (they admittedly were invented long before, but technology suddenly made them affordable).
    Demand for individual goods may be saturated. Smartphones and the like are not going to make a long-term difference.
    If there is something demand for does not look saturated, it is public goods: education, transportation infrastructure, health care, etc. And that's what the governments save on. No wonder the economy is not taking off.

  13. CommentedShavonda Brandon

    The current state of the economy is clearly a result of crises. Although the idea of long term innovation droughts sound interesting, I would never credit changes in innovation for stagnation that is felt so severe and intrinsic. I feel that the crash brought us back to the realization the resources that we have are finite.
    I feel that the fundamental principles of economics are the culprits of this extended downturn: how we react and deal with scarcity and the uncertainty that coincidences with it. Sure, the goods have become more complex, but the same idea still applies. In the case of the most recent financial crises, the credit bubble was merely a result of people wanting more than what was presumably available. As prices of collateralized debt contracts spread farther and farther away from their true value, defaults ensued. Mortgages holders realized that they had taken on debt they could not handle, and the illusion of the indestructible financial market was gone.
    Our current economy seems as if it is suffering from an internal panic that is reminiscent of the fact that we can not demand everything we want with out consequences-- sometimes you have to watch the bubble burst.
    In all honesty, I feel that in order stimulate growth once again, we have to veil the reality of scarcity. Allowing credit market to increase again, and ignite a desire for new investment and innovation, in those who feel that economy is not in the proper state to initiate such a feat, but with awareness to the need for regulation and proper supervisor. Because it has become clear that facing the harsh reality over use of some resources, will promote only stagnating economy rather than a growing one.

  14. CommentedZsolt Hermann

    Unfortunately both options, innovation crisis or financial crisis still presume that humans are stand alone creatures, completely independent of the system they exist in, who can do whatever they want and any limit of growth and development is solely dependent on human ingenuity and activity.
    This attitude completely ignores that humans as any other living creatures are part of the vast, surrounding natural system, and that our biological body, and psyche is fully dependent on the same natural laws and principles as any other life-form.
    The only difference between humans and other animals is the ego, this self-centered conscious mind, that separated humanity from the rest of the system. Human evolution equals the evolution of the human ego.
    As a result today we fully believe we are outside of the system and we can do whatever we want.
    The global economical and financial crisis, the growing number of social and international conflicts, the loss of future direction all stems from this fact that we left the natural system and now drove ourselves into a dead end.
    If we want to continue evolution and develop in a positive way we have to return within the laws and principles of the natural system, first of all thriving for balance and homeostasis, and we have to change the intention, direction of exploration and innovation. Today we explore, study and innovate in order to stuff ourselves, to exploit and self serve regardless of the system, ignoring any long term prospects whether our conduct is sustainable of not.
    In the future any exploration, study or innovation has to happen with keeping the general laws of balance and homeostasis in mind, only act within the boundaries of natural necessity and available resources.
    By becoming partners with the system we would be able to get to know it much deeper than we do today, and our life quality, and our future prospects would be infinitely higher, entering a qualitatively much better existence.
    Humanity's superiority over other animals is the conscious capability of exploring, getting to know this natural system and adhering, adapting to it by free choice.
    The choice of going against the system is not a wise one, it caused the deepening crisis and can lead to much worse, even existential problems.

  15. CommentedJose araujo

    First, we are very far from our production-possibility curve and further away from the technology limits, so the nexus between the current situation and Innovation is nonexistente.

    Yet we are used to SUPPLY sidders arguments to try to maintain alive a theory that should be extinct long ago, a theory that persists on the full employment DOGMA, when everybody can see that e are very far from full employment.

    This isn't a supply problem, we are living in a DEMAND crises. People don't have money to buy stuff, let alone technological stuff.

    Without demand, there is little incentive for innovation, firms over-exploit their assets and technology cycles are broken.

      CommentedPaul A. Myers

      Excellent points. I would go further and state that increases in public infrastructure spending improve demand in the short term while improving overall productivity in the intermediate term and beyond.

      Let's postulate that public investment is the base for long-term secular improvements in productivity and rising standards of living. If so, then the whole "government is the problem" hypothesis is wrong.

      What the fiscal cliff debate shows is that our problem is the concentrated political power of the top .1 percent of the wealth distribution since they want to go AWOL on funding public investment.

      The selfishness of the .1 percent indicates they misunderstand the fundamental driver of economic progress for approximately the past two centuries.

  16. CommentedThomas Haynie

    Predicting scientific futures is a little like trading for a living. You can’t see the future with certainty. What we KNOW is that in the past men have claimed that Science has given us it’s all only to be dead wrong. Technological progress in general is increasing.

    I would lend weight to the Kasparov-Thiel argument in as much as the recent bubble essentially stretched beyond just housing as so many do. We may have seen now .. as was seen in the late 20’s a market boom fueled by simultaneous industry sources.

    I think the author is dead right about coming dramatic changes of Nano Technology, biotechnology, healthcare and energy.

  17. CommentedMarc Laventurier

    Mr. Thiel's notable contribution to innovation, PayPal, could have been written in COBOL without loss in translation, though it's philosophical motivation was at least in part to provide an escape route for capital from the sort of 'financial repression' visited on populations by regimes bent on devaluing their currencies. This project seems not to have been realized, and Thiel's ministrations now seem dedicated to the growth of the libertarian lumpenproletariat's social graph, that and making money.

    Mr. Kasparov's idealism seems deeper, and mated to the kind of mind that could well defend the greasy castle keep of the chess world, though innovation of a specialized sort left him playing black and feeling blue in 1997.

    Mr. Shuttleworth's innovation extended the highly technical and ethical contributions of Stallman and Torvalds to domesticate and distribute a free version of a powerful operating system, arguably the key kind of software running the world today. That is what growth and innovation really look like - for free - just add electrons.

    Prof. Rogoff could contribute to innovation by entertaining the idea that the recourse to limitless nominal economic growth may be more an artifact of capitalism than a unnecessary feature of human progress. His astute academic colleagues will be happy to explain it to him.

  18. CommentedFrank O'Callaghan

    Not all the past innovations were commercial propositions. Writing did not immediately generate a profit. Not much does immediately.

    The great problem for innovation today is that the criterion of immediate profit is the crucial one for investment in research. Would a cheap, non patentable, easily produced cure for cancer be a commercial proposition? Would a contagious viral agent that cured diabetes be an attractive business proposition? Clearly not! What about a nitrogen fixing, disease resistant, fast growing, easily propagated, nutritious plant that could grow in currently unusable environments?

    We need to fund innovation for the global benefits it has rather than the profits alone.

  19. CommentedJan Smith

    Slowdown in technology is not the only cause of secular stagnation or decline. Three other possibilities:

    1. Proliferation of lobbies, hence of monopolies and rents.
    2. Concentration of wealth, hence excess saving and volatile asset prices.
    3. Exploding population, hence exploding costs of plunder and pollution.

    Perhaps if we exclude these causes from our model, they'll vanish from the world?

  20. CommentedSergei Vorobiev

    I would prefer to attend a chess match between Rogoff and Kasparov rather than a celebrity economics debate between them. A sound suggestion for the next round of the Oxford University celebrity debates - pit Rogof against Mr. Burns or Mother Teresa. Well, they cannot do the latter than maybe they should pick Mike Tyson instead.

  21. CommentedProcyon Mukherjee

    I think there is a serious point that we are missing on innovation as path-breaking innovation seemed to have stymied. It is not necessary that for continuity of innovation, the pipeline of projects should deliver as path-breaking outputs as the steam engine. It is equally important that the benefit of innovation is passed on to a majority of people in a manner that makes economic sense for all stake holders. Innovation could be meaningless if it is locked in gains for a minuscule minority, thus we have a strong connection with the economics of innovation.

    Evidence is strong on both sides of the argument, that crisis emboldens businesses to innovate while the drive for profit maximization could be a strong deterrent if the market is swooned into believing the short-term thrust of ‘profit at all costs’.

    Procyon Mukherjee

  22. CommentedMatt Stillerman

    I completely disagree that today's innovations are of less significance than those mentioned. Consider:

    Each of the innovaitons mentioned has taken many years (or, in the case of running water, over 2000 years) to have its impact. So, we should be looking 50 to 2000 years down the road to see the impact of our current crop.

    Our electronics are truly remarkable. They are the most complex artifacts ever created by any civilization, by many orders of magnitude. Indeed our electronic "gadgets" by some measures are more complex than we are! Humans have some 30,000 genes. Perhaps there are three times as many regulatory sites in the human genome (a guess). But garden-variety microprocessors routinely have five orders of magnitude more transistors than that. And this explosion of complexity (i.e. Moore's Law) shows no sign of slowing down.

    For another example, consider current efforts to build quantum computers based on quantum entanglement. Purposefully entangled qbits represents a completely new state of matter that, as far as we know, has never existed before.

    Recent advances in biology and medicine have resulted in an unprecedented understanding of these subjects. Within just the last ten years we have gone from the comparatively primitive gene-protein equivalence view to a much broader understanding of biology that includes, for example epigenetics. Of course that starting point was, itself, a huge scientific triumph.

    Where will these scientific advances lead? We need to wait at least 50 years, and perhaps much longer to know the answer. For example, number theory, which currently secures a significant fraction of the world's wealth, was, until 35 years ago, an "impractical" branch of pure mathematics -- under development for roughly the last 4000 years!

    I have no doubt whatsoever that some subset of today's innovations will withstand this test of time, and will prove to be very significant to our civilization.

      CommentedStephane Levasseur

      Mr. Stillerman,
      In developped countries, 70% of the economy are services provided to humans by humans. Today's technological innovations are thrilling but are of less ECONOMIC significance because they won't lead to a major increase in economic output.
      Science and technology can improve the primary and secondary sectors of the economy. Its impact on the third sector (services) are limited. Increase in economic output is achieved by improvement of human capital: education, humanities research, etc.
      What do you think of my idea?

      Stephane Levasseur

      CommentedAndrew Purdy

      Real economic growth is not sustained by complexity. It is sustained by the ability to generate, transform, and utilize ever greater amounts of energy. Today's electronic devices have already passed the point of diminishing returns here. It does not matter how complex it is if it can't power engines, make things fly faster up to (and maybe beyond) the speed of light, move more earth, build buildings cheaper and faster, build colonies in space, or expand toward Galactic Empire. The only way exponential growth can continue indefinitely is to expand into the galaxy and beyond. If we remain confined to the earth with present day energy sources, economic stagnation is an absolute physical requirement.

  23. CommentedJules Pierre

    I am inclined to think that there is an absolute correlation between scientific/technical knowledge and GDP. In that case, as the pace of knowledge growth is to be measured in decades, and that knowledge can only pile up, year-scale GDP or growth downturns would be due to chaos in the economic system.

    This doesn't mean, though, that the long-term pace of innovation isn't slowing down.

    Another explanation for the current situation would be that the high growth rates of the second half of the XXth century have built a "growth debt" that must now be reimbursed and hinders current growth. Much of the economy 50 years ago wasn't durable. Now progress is needed even to maintain production levels, and increasing them requires even more of it. Global inequalities is another type of debt, one that used not to matter much but that became apparent with modern communication means and must now be serviced.

  24. Commentedarnim holzer

    I agree with Professor Rogoff but would also add that one needs to take a very long look at development cycles and periods of "darkness", for which the recent credit bust recession hardly qualifies, in order to diagnose the types of implications Thiel and Kasparov are submitting. Additionally, while many scientific discoveries are adapted and recycled for commercial use in the tradeable goods sector, the service side is less systematic and quantifiable. The service sector and the power it manifests in an economy can be overwhelming and high value added in its impact for global advancement. Unfortunately, service sector innovation is not something that can be formulaically developed but thrives in the free market of incentives and ideas. While the recent economic recession and its impacts have served to slightly diminish the focus on the next "new new thing" in services (as cost containment and efficiency have been of greater import), I believe service innovation will once again drive the US economy. One needs only think about when companies like FedEx, Starbucks, and Apple arose and how much of their genius was in service, not technology.

  25. CommentedJohn Nick

    In a competitive economy innovation can be a major factor in maximizing the profit. But the main goal is always maximizing the profit. Can innovation and profit be contradictory at some point ? Of course they can. This is the case of self-sacrifice profit. Meaning that short term positive balance is incentive enough to sacrifice the future. And if true competition is not active anymore (too big to fail positions on market) incentive for innovation is once more reduced.
    Such phenomena are already present. It's the case of banking and financial sector.
    We live an era of profit maximization and less market competition.

      Commentedradek tanski

      What incentive is there to invest for a founder when fast followers just take over the idea?

      Too many fast followers. No protection of founders.

      Until China is in a position where innovation would generate more then it gets from western business mimicry at a lower cost, no real point for the west to innovate.

      The little guys reckon why bother if 3 months down the road the opportunity is feeding asians.

  26. Commentedjim bridgeman

    I'm just extrapolating on an idea of Richard Roll's, but how about this? Financial values (including those deriving from real estate values) are validated by future incomes, and in a highly leveraged way by the growth rates of future incomes. A widespread realization that future income growth rates could not be expected to be large enough to validate financial values at the time is a plausible explanation for the financial crisis. Roll hypothetically attributed the realization that income growth rates weren't going to be as anticipated in financial values to emerging political circumstances (leftward drifts.) But maybe it was some sort of emerging realization of the innovation deficit?

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