Tyler Cowen on the Great Stagnation

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🗓️ 14 February 2011

⏱️ 61 minutes

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Summary

Tyler Cowen of George Mason University and author of the e-book The Great Stagnation talks with EconTalk host Russ Roberts about the ideas in the book. Cowen argues that in the last four decades, the growth in prosperity for the average family has slowed dramatically in the United States relative to earlier decades and time periods. Cowen argues that this is the result of a natural slowing in innovation and that we expect too much growth relative to what is possible. Cowen expects improvements in the rate of growth in the future when new areas of research yield high returns. The conversation includes a discussion of the implications of Cowen's thesis for politics and public policy.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	another information related to today's conversation. Our email address is mailadicontalk.org. We'd
0:33.6	love to hear from you.
0:36.6	Today's February 9th, 2011, and my guest is Tyler Cowan, Professor of Economics at George
0:45.2	Mason University. He blogs at marginal revolution, and his latest book is The Great Stagnation. How
0:51.8	America ate all the low-hanging fruit of modern history, got sick, and will eventually feel
0:57.3	better. Tyler, welcome back to Econ Talk.
0:59.7	Thank you, Russ.
1:00.9	So our topic for today is The Great Stagnation. Let's start with what you mean by The Great
1:05.4	Stagnation, and then we'll move on to your explanation for it. When you talk about The Great
1:10.0	Stagnation, what phenomenon or phenomena are you referring to?
1:14.1	If we look at the earlier part of the 20th century, standard of living for the average family
1:19.2	increased very rapidly. If we compare, say, a 40-year period, 1917 to 1957, people are
1:26.0	getting electricity flush toilets, automobiles, there are very rapid increases in the standard
1:31.4	of living. If we look at the same data or the anecdotes post-1973, there's a slow down
1:38.8	in growth in living standards for the average person or the average family. And that's
1:43.8	what I mean when I refer to The Great Stagnation. My grandmother saw a lot more change in her
1:48.4	life than I have in mind.
1:50.4	Yeah, I think there's some truth to that, obviously, but I'm also a little bit of a skeptic.
1:54.4	So one thought is that in the 1917 and 1957 period, of course, there was a immense amount
	...

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