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That's a great post, thanks for bringing it up again.

I have two observations: one is that under exponential growth, wealth, GDP and GDP growth become interchangeable, as the rate of GDP growth squals the ratio of GDP to wealth.

The second observation is that DoDo above is forgetting that we're talking about rates so that if the same amount of money can be pushed around faster then GDP will increase.

(source) Appart form money supply and inflation, the velocity of money is the third factor in GDP.

So maybe all that's happening with global GDP growth is that the economy is accelerating. The problem is that thermodynamic cycles become more and more inefficient the faster they are operated, and that these inefficiencies are not properly accounted in economics.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Jun 29th, 2006 at 09:04:00 AM EST
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