RIP Robert Solow
Posted: Fri Dec 22, 2023 3:54 pmAs is often the case, ideas today often seem so blindingly obvious that it's hard to believe they were once revolutionary.
Solow in 1956 bucked conventional wisdom, arguing that simple accumulation of capital (more cultivated land, more buildings, more machines, etc.) led to ever increasing economic output, for the simple reason that capital depreciates. Once the accumulated capital stock is large enough, simply replacing that which has become old and obsolete each year, consumes all available investment funds.
So if economic growth (and the Romers argued that economic growth for about one million years was extremely close to 0% per year) cannot be explained by simple accumulation of capital, what does explain it? It must be technological innovation.
Hard to believe that in 1956, the idea that technological innovation was a source of economic growth, was revolutionary.
He taught Alan Blinder, who is a good guy despite having a big mouth. Not so sure about Alan's former co-worker Paul Krugman, who definitely was a good economist before he became a muckraker. He has a big mouth (at least when sitting in front of a keyboard, he's quite reserved in person), but I'll let others decide whether he is a good guy.
So now we learn that Robert Solow was on the 99-year depreciation schedule.
Never met Prof. Solow (at least that I'm aware of). It seems I have missed my chance now.
Solow in 1956 bucked conventional wisdom, arguing that simple accumulation of capital (more cultivated land, more buildings, more machines, etc.) led to ever increasing economic output, for the simple reason that capital depreciates. Once the accumulated capital stock is large enough, simply replacing that which has become old and obsolete each year, consumes all available investment funds.
So if economic growth (and the Romers argued that economic growth for about one million years was extremely close to 0% per year) cannot be explained by simple accumulation of capital, what does explain it? It must be technological innovation.
Hard to believe that in 1956, the idea that technological innovation was a source of economic growth, was revolutionary.
He taught Alan Blinder, who is a good guy despite having a big mouth. Not so sure about Alan's former co-worker Paul Krugman, who definitely was a good economist before he became a muckraker. He has a big mouth (at least when sitting in front of a keyboard, he's quite reserved in person), but I'll let others decide whether he is a good guy.
So now we learn that Robert Solow was on the 99-year depreciation schedule.
Never met Prof. Solow (at least that I'm aware of). It seems I have missed my chance now.