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Economic Growth to the Present - Coggle Diagram
Economic Growth to the Present
The First Industrial Revolution
The first revolution had little to do with science, no conceptual leaps instead many years of experimental engineering
Mokyr 'chemical industry with no chemistry, iron industry without metallurgy'
Prominent example was the invention of the spinning jenny - the inventor was illiterate
The Second Industrial Revolution
Post 1870
Innovations in chemistry, medicine and physics begin to have economic payoffs
'Marriage of science and technology'
General purpose technologies
GPTs are technologies that improve productivity across a wide range of industries
GPTs do not immediately result in fast growth, often requiring decades of adoption and innovation. Eg. Steel was around for a long time but needed innovation to become cheap
Steam engines another good example, invented 1712 but only became widely used in late 1800s when Watt made them cost effective. Use 5 lbs of coal per hp instead of 30
Social consequences of the 2nd revolution
Houses - previously countryside or small rooms in the city.
Now - increasing incomes and new technologies (steel) allow for building up in big cities
Food - pre-industrial diets were monotonous, you ate what you grew
Now - refrigeration (1870s) and supermarkets (1930s) rapidly diversify food consumption
Health - life expectancy previously extremely low, less than 1/3 make it to adulthood.
Now - changes to human waste such as flushing toilets prevent diarrheal diseases and daily bathing and clean running water
Convergence v Divergence
The whole world has access to these technologies so why has not everyone developed?
Convergence - expect the world to converge as much easier to copy technologies than to invent
However up until the 1980s more evidence for divergence
Post 1980s a convergence though, due to the slowing of the frontier, as less innovation is taking place in the richest countries.
Critics argue this is just due to high commodity prices
The future of growth
Gordon - at the end of a golden age
AI will not be as transformative as previous GPTs
Technological growth has peaked
We have already invented the most useful technologies
Optimistic outlook
The root causes of slower growth are actually decreased fertility and manufacturing output share of GDP
Both of these causes are not due to failures but actually successes
Greater incomes led us to choose to decrease fertility
Success in driving down manufactured goods prices led to them having a lower share of GDP