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I've never heard of such a magic number.  Long-term sustainable growth depends on innovation.  If innovation raises productivity sufficiently, I see no reason for why economies cannot grow at annual rates above 3.25%, cet par..

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jun 29th, 2006 at 03:56:51 PM EST
[ Parent ]
I suppose long-term sustainable growth depends on continuous productivity growth over the long term?

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 03:58:47 PM EST
[ Parent ]
That seems to be the dominant view, because it's typically understood that labour and capital are characterised by diminishing returns, so the only way to alter long-term growth trends is through innovation.  You can only add so many workers to the production line and so many computers to the office before reaching the optimal outcome.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jun 29th, 2006 at 04:01:47 PM EST
[ Parent ]
You'll have to ask him where his magic pi comes from - I haven't the foggiest

but here's another clip from the article

But his main thesis of the lean years to come, if I can paraphrase it well, had a lot of insight. In the last 50 odd years there have been 3 main investment regimes. The first, 1949 - 1966, was the growth of US hegemony due mainly to that country being the only one with the infrastructure still up and running. But then America became lazy, leading to the second regime - the Rust Bowl, 1967 - 1981. This was the time of OPEC, political scandal and 350% cumulative inflation. It was the Age of the Wimps, according to Woody. He always added a rhetorical "Correct?" after startling us with his more outrageous opinions
1982 saw the beginning of the 3rd investment regime, which lasted until 1997. It was rebirth and transformation, with Fed chairman Paul Volker bringing inflation down to 1.5%. Net US household wealth went up 150%. The stock market shot up 700%, and the US creamed about 85% of the global profit from the post-industrial material science revolution.

Here's Woody's site:  http://www.sedinc.com/


You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 29th, 2006 at 04:05:47 PM EST
[ Parent ]
Hmm.  Not terrible descriptions of the periods, I suppose, but why does he conclude that the third ended in '97?  The US economy continued to chug along until 2000 or 2001 (depending on which political party you ask).

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jun 29th, 2006 at 04:10:31 PM EST
[ Parent ]
Because that is when I met him and wrote the article

You can't be me, I'm taken
by Sven Triloqvist on Thu Jun 29th, 2006 at 04:12:59 PM EST
[ Parent ]
Oops.  I really should read more thoroughly.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jun 29th, 2006 at 04:26:46 PM EST
[ Parent ]
No problem - I'd be interested to know his views now.

BTW check out his website and you'll find some interesting articles under 'good reads'. Woody is clearly a nutter and constantly referred to himself as a genius in conversation. But he has some novel and often heretical insights.

You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 29th, 2006 at 04:39:50 PM EST
[ Parent ]
Novel and heretical usually translate to interesting.  Thanks for the link.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jun 29th, 2006 at 04:45:51 PM EST
[ Parent ]

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