The great stagnation

By R.A. | WASHINGTON

I'VE just read Tyler Cowen's new book, "The Great Stagnation". You should too; it's available online (only), quite short, and just $4. The publishing model is fascinating in its own right and worth a post, but that will have to wait, as the material itself deserves priority. I don't agree entirely with all of that material, but I think it's safe to say that Mr Cowen's book is an important one that will have a profound impact on the way people think about the last thirty years.

There is a lot to the book for such a short read, but I'll try to summarise the key ideas briefly. There are two kinds of economic growth possible in this world. One can take good ideas already in use elsewhere, adopt them, and make use of underused stocks of people and capital. That's what China and India are currently doing, and we shouldn't mistake their rapid growth for something it's not. Or one can come up with new ideas and apply them in ways that allow the economy to grow.