"Unlike the “vanishing secrets” theory of stagnation, our incentive-based theory of stagnation suggests that continued stagnation need not be inevitable." https://www.nber.org/papers/w26752.pdf …
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TFP is even more broken. It's based on GDP. Diane Coyle: “Gordon repeatedly explains why it isn't possible to evaluate the impact of inventions through GDP and price statistics, and therefore through the total factor productivity figures based on them.” http://www.enlightenmenteconomics.com/blog/index.php/2015/12/the-rise-and-fall-of-american-growth/ …
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How much of the innovation Stripe contributes to the economy *reduces* GDP and TFP since consumers pay less? I am a big fan of Stripe and other companies that deliver consumer surplus. People claiming the arrival of the semiconductor in the 70s reduced innovation is bonkers.
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Interesting to link this to current state of capital glut chasing too few productive ideas...in a world where software “eats” the world, the value enhancing disembodied digital services need little capital but throw off a lot to owners. This pushes value from capital to talent.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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TFP, as typically measured, is problematic. And the paper cited is a theoretical one, showing that the emphasis on measuring accomplishment by citation *may* lead scientists to focus on ideas that will be recognized immediately 1/n
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and hence, the paper assumes, will be incremental. This is plausible but not obviously so. But (moreover) since there would also be an increase in the scientists, the net effect of the focus on citation is unclear. n/n
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