Sunday 2013-11-03

The Great Stagnation by Tyler Cowen

One interpretation of the drop in median real wages and rate of apparent technological change is that our new tech is nuking old our economy without creating a lot of new jobs. Another is that we just haven't learned how to use our new tech yet, i.e. the majority of us are still looking at our new gee-gaws and haven't actually done anything with them yet.

Another is that there's a hidden third variable that ties stagnating real median incomes together with apparently not-so-useful technology.

As the rate of economic growth slows, well, you can see the problem. It’s hard to buy off the various interest groups because government revenue is down, and they become more and more likely to engage in a “fight to the death” over political control.